PUBLISHED OPINION
Case No.: 95-0301
†Petition for
review filed.
Complete
Title
of
Case:RANDAL L. BELL
AND MARY BELL,
Plaintiffs-Respondents-Cross
Appellants,
v.
EMPLOYERS MUTUAL CASUALTY COMPANY
OF DES MOINES, IOWA,
Defendant-Appellant-Cross
Respondent.†
Submitted
on Briefs: October 9, 1995
COURT COURT OF
APPEALS OF WISCONSIN
Opinion
Released: November 30, 1995
Opinion
Filed: November
30, 1995
Source
of APPEAL Appeal and
Cross-Appeal from a judgment
Full
Name JUDGE COURT: Circuit
Lower
Court. COUNTY: Grant
(If
"Special" JUDGE: John
R. Wagner
so
indicate)
JUDGES: Gartzke,
P.J., Sundby and Vergeront, JJ.
Concurred:
Dissented: Sundby,
J.
Appellant
ATTORNEYSFor the defendant-appellant-cross
respondent the cause was submitted on the briefs of Bradley D. Armstrong
and Arthur E. Kurtz of Axley Brynelson of Madison.
Respondent
ATTORNEYSFor the plaintiffs-respondents-cross
appellants the cause was submitted on the brief of Ronald M. Fitzpatrick
of Fitzpatrick, Smyth, Dunn & Fitzpatrick of La Crosse.
COURT OF APPEALS DECISION DATED AND RELEASED November
30, 1995 |
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. 95-0301
STATE OF WISCONSIN IN
COURT OF APPEALS
RANDAL
L. BELL
AND
MARY BELL,
Plaintiffs-Respondents-Cross Appellants,
v.
EMPLOYERS
MUTUAL CASUALTY COMPANY
OF DES
MOINES, IOWA,
Defendant-Appellant-Cross Respondent.
APPEAL
and CROSS-APPEAL from a judgment of the circuit court for Grant County: JOHN R. WAGNER, Judge. Reversed and cause remanded with
directions.
Before
Gartzke, P.J., Sundby and Vergeront, JJ.
VERGERONT,
J. This action arises out of an
accident that occurred in Iowa when Randal Bell, acting within the scope of his
employment for Iverson Construction, Inc., was struck by a vehicle driven by a
co-employee, Mark McAllister. Randal
and Mary Bell filed an action against Iverson Construction's worker's
compensation and business automobile liability insurer, Employers Mutual
Casualty Company of Des Moines, Iowa, alleging that the injuries Bell sustained
were the result of McAllister's negligence and that Employers Mutual was liable
under the business automobile policy because it had waived a co-employee
exclusion provision.
The
Bells appeal from the portion of the judgment denying their motion for default
judgment. They contend that Employers
Mutual failed to file a timely answer to their amended summons and complaint
and that the trial court erred in concluding that they did not properly serve
Employers Mutual with their amended complaint.
We conclude the Bells properly served Employers Mutual's attorney with
their amended complaint pursuant to § 801.14(2), Stats. We remand to
the trial court with directions to determine whether, in the exercise of its
discretion, the Bells' motion for default judgment should be granted.
Employers
Mutual appeals from the portion of the judgment denying its motion for summary
judgment. The primary issue is whether
the Iowa two-year statute of limitations for personal injury actions, made
applicable to this action by § 893.07, Stats.[1],
is extended by the provisions of § 102.29(4) and (5), Stats.[2] If the Iowa statute of limitations is not
extended by § 102.29(4) and (5), the Bells' action, commenced more than two
years after the date of the injury, is time barred. This issue will be moot if on remand the trial court grants the
Bells' motion for default judgment.
However, we address it nonetheless because the parties have briefed the
issue and the trial court may, in the exercise of its discretion, deny the
Bells' motion for default judgment. We
conclude that the Iowa two-year statute of limitations is not extended by
§ 102.29(4) and (5), and that the Bells' action is time barred.
BACKGROUND
The
following facts are undisputed. Randal
Bell was injured on August 22, 1989, in Iowa when he was struck by a
vehicle driven by a co-employee, Mark McAllister. Both Bell and McAllister were acting within the scope of their
employment for Iverson Construction.
Bell was a resident of Wisconsin and Iverson Construction was a
Wisconsin corporation with its principal place of business in Platteville,
Wisconsin.
At
the time of the accident, Iverson Construction had a business automobile
liability policy and a worker's compensation policy issued by Employers
Mutual. Pursuant to the worker's
compensation policy, Employers Mutual paid worker's compensation benefits to
Bell for the injuries he sustained in the accident.
The
Bells filed their original summons and complaint against Employers Mutual on
February 24, 1992, alleging that the accident was caused by McAllister's
negligent operation of the vehicle. The
complaint alleged that Employers Mutual had waived the co-employee exclusion
provision of its business automobile liability policy pursuant to a policy
endorsement and that Employers Mutual was liable for the resulting damages.
Employers
Mutual filed an answer and a motion to dismiss the Bells' complaint on the
ground that the action was barred by Iowa's two-year statute of limitations,[3]
made applicable by Wisconsin's borrowing statute, § 893.07, Stats.[4]
Employers Mutual argued that because Bell's injuries were sustained in Iowa,
the two-year Iowa statute of limitations applied rather than Wisconsin's
three-year statute of limitations, § 893.54, Stats.[5]
After
receiving Employers Mutual's answer and motion to dismiss, the Bells filed an
amended summons and complaint on April 27, 1992, and mailed authenticated
copies on May 1, 1992, to Employers Mutual's attorney. In the amended complaint, the Bells repeated
the allegations made in their original complaint, and added that David Holmes,
Iverson Construction's safety superintendent based in Platteville, Wisconsin,
was negligent in failing to establish and enforce certain safety policies for
Iverson Construction. The Bells
asserted that this negligent conduct occurred in Wisconsin and was the cause of
Bell's injuries. Therefore, according
to the Bells, Wisconsin's three-year statute of limitations applied and this
claim was not time barred.
The
Bells also asserted in the amended complaint that Employers Mutual should be
estopped from asserting a statute of limitations defense against the claim
based on McAllister's negligence. They
alleged that because Employers Mutual was both the liability carrier and
worker's compensation carrier for Iverson Construction, it was required to
promptly notify Bell and the Department of Industry, Labor and Human Relations
(DILHR) of the dual coverage pursuant to § 102.29(4), Stats.
According to the amended complaint, because Employers Mutual failed to
do so, it should be equitably estopped from asserting a statute of limitations
defense in any action commenced by the Bells against Employers Mutual within
six years of Bell's injury under the provisions of § 102.29(5), Stats.
The Bells did not dispute that § 893.07, Stats., requires the application of the Iowa two-year statute
of limitations, rather than Wisconsin's three-year statute of limitations, on
the claim based on McAllister's negligence.
Employers
Mutual filed an answer to the amended complaint and a motion to dismiss the
amended complaint on June 3, 1992, alleging that both of the Bells' claims were
barred by the Iowa two-year statute of limitations.
The
Bells, in turn, brought a motion for default judgment, contending that
Employers Mutual had failed to answer their amended complaint within the twenty
days allotted in § 802.09(1), Stats. They contended that pursuant to
§ 801.14(2), Stats.,[6]
service of their amended complaint on Employers Mutual's attorney was proper.
The
trial court denied the Bells' motion for default judgment on the ground that it
was improper to serve the amended summons and complaint on Employers Mutual's
counsel, rather than on Employers Mutual itself pursuant to § 801.11(5), Stats.
The trial court also denied Employers Mutual's motion for summary
judgment. It concluded that because
Employers Mutual had not given notice to Bell and DILHR of its dual role as
provider of both liability and worker's compensation insurance, Employers
Mutual was precluded from asserting a statute of limitations defense under
§ 102.29(5), Stats.
When
we review a summary judgment, we follow the same methodology as the trial
court. United States Fire Ins. Co.
v. Good Humor Corp., 173 Wis.2d 804, 818, 496 N.W.2d 730, 734 (Ct. App.
1993). If there is no genuine dispute
of material fact and one side is entitled to judgment as a matter of law, the
action is appropriate for summary judgment.
Id.
The
parties have stipulated that Bell's injuries and damages were the result of his
co-employees' negligence and that Employers Mutual's policy provides coverage
for the $175,000 in damages caused by Bell's co-employees' negligence.
The
resolution of the issues raised by both parties' appeals involves the
application of statutes to an undisputed set of facts. This presents a legal issue, which we
determine de novo. Thimm v.
Automatic Sprinkler Corp., 148 Wis.2d 332, 335, 434 N.W.2d 842, 843
(Ct. App. 1988).
DEFAULT JUDGMENT
The
Bells contend that the trial court erred in denying their motion for default
judgment on the ground that service of their amended complaint was
insufficient. They argue that service
of their amended complaint on Employers Mutual's attorney, rather than on
Employers Mutual, was proper under § 801.14(2), Stats., because Employers Mutual's attorney had appeared and
responded to the original summons and complaint. We agree.
It
is undisputed that the Bells mailed their amended complaint to Employers
Mutual's counsel on May 1, 1992, and that Employers Mutual did not serve an
answer within twenty days, as required by §§ 802.06(1) and 802.09(1), Stats.
Section
801.14, Stats., on which the
Bells rely, provides in part:
(1) Every order required by its terms to be
served, every pleading unless the court otherwise orders because of numerous
defendants, every paper relating to discovery required to be served upon a
party unless the court otherwise orders, every written motion other than one
which may be heard ex parte, and every written notice, appearance, demand,
offer of judgment, undertaking, and similar paper shall be served upon each of
the parties....
(2) Whenever under
these statutes, service of pleadings and other papers is required or permitted
to be made upon a party represented by an attorney, the service shall be made
upon the attorney unless service upon the party in person is ordered by the
court.... The first sentence of this
subsection shall not apply to service of a summons or of any process of court
or of any paper to bring a party into contempt of court.
We
read § 801.14, Stats., as
providing that once an action has been commenced by filing a summons and
complaint, provided service of the summons and complaint has been made on the
defendant within sixty days of filing pursuant to § 801.02(1), Stats., service of an amended complaint
under § 802.09, Stats.,[7]
may be on the defendant's attorney. In In
re Petition of Wisconsin Elec. Power Co., 110 Wis.2d 649, 329 N.W.2d
186 (1983), our supreme court summarized the provisions of § 801.14, Stats., as follows:
[I]t is well-accepted, black-letter law that an attorney
is not authorized by general principles of agency to accept on behalf of a
client service of process commencing an action.... In contrast, the black-letter law is that once an action has
begun and the attorney has appeared in the action on behalf of a party, service
of papers may be upon the attorney.
Id. at 657, 329 N.W.2d at 190.
The
Bells commenced their action when they filed their summons and complaint and
served Employers Mutual with authenticated copies pursuant to § 801.11(5),
Stats. Once the action was commenced and an attorney appeared on behalf
of Employers Mutual, § 801.14, Stats.,
directed that service of pleadings and other papers would be on Employers
Mutual's attorney, unless ordered otherwise by the court. Therefore, service of the amended complaint
on Employers Mutual's attorney was sufficient.
Employers
Mutual points to the language in § 801.14(2), Stats., which provides that "[t]he first sentence of
this subsection shall not apply to service of a summons," and argues that
§ 801.14(2) does not apply to service of an amended complaint. However, this limiting language in
§ 801.14(2) refers only to service of a summons. The purpose of serving a summons upon the
person pursuant to § 801.11, Stats.,
is to confer personal jurisdiction on the court over the defendant and to
notify the defendant that an action has been commenced against such
defendant. See
§ 801.04(2)(a), Stats.; American
Family Mut. Ins. Co. v. Royal Ins. Co., 167 Wis.2d 524, 530, 481 N.W.2d
629, 631 (1992). The Bells conferred
personal jurisdiction on the court over Employers Mutual and notified Employers
Mutual that an action had been commenced against it by serving an authenticated
copy of their original summons on Employers Mutual pursuant to § 801.11(5)
within sixty days of filing their original summons and complaint in court. When the Bells amended their complaint to
add an additional claim against Employers Mutual, there was no need to
re-confer personal jurisdiction over Employers Mutual via the service of an
amended summons upon the person pursuant to § 801.11(5). See J. F. Ahern Co. v. Wisconsin
State Bldg. Comm'n, 114 Wis.2d 69, 80, 336 N.W.2d 679, 685 (Ct. App.
1983) ("Because we determine jurisdiction as of the time an action is
commenced, it is not necessary that an amended complaint comply with
subsequently imposed jurisdictional requirements."). Also, it was not necessary to re-notify
Employers Mutual that an action had been commenced against it.
Employers
Mutual argues that even if service of the Bells' amended complaint on its
attorney was sufficient under § 801.14, Stats.,
its answer to the Bells' original complaint stands as an answer to the amended
complaint. However, the cases relied
upon by Employers Mutual for this proposition, see, e.g., Ellison
v. Straw, 119 Wis. 502, 97 N.W. 168 (1903), and First Nat'l Bank
of Elkhorn v. Prescott, 27 Wis. 616 (1871), were decided prior to the
enactment of § 802.09(1), Stats. That section unambiguously provides that,
"A party shall plead in response to an amended pleading within 20
days after service of the amended pleading unless (a) the court otherwise
orders or (b) no responsive pleading is required or permitted under s.
802.01(1)." (Emphasis added.)
There
is no indication that the trial court ordered that Employers Mutual did not
have to respond to the amended complaint.
The Bells' amended complaint is not a pleading to which no responsive
pleading is required or permitted under § 802.01(1), Stats.
Employers Mutual was therefore required to plead in response to the
Bells' amended complaint. Its answer to
the Bells' original complaint does not stand as an answer to the Bells' amended
complaint.
Because
we conclude that service of the Bells' amended complaint on Employers Mutual's
attorney was sufficient, the trial court's denial of the Bells' motion for
default judgment on the ground that they failed to properly serve Employers
Mutual was erroneous. Because of its
ruling on this issue, the trial court did not decide whether it should exercise
its discretion to grant a default judgment under § 806.02, Stats.
The decision to grant or deny a motion for default judgment is within
the trial court's discretion. Oostburg
State Bank v. United Savings & Loan Ass'n, 130 Wis.2d 4, 11, 386
N.W.2d 53, 57 (1986). We may not
exercise a trial court's discretion. See
Wisconsin Ass'n of Food Dealers v. City of Madison, 97 Wis.2d
426, 434-35, 293 N.W.2d 540, 545 (1980).
Accordingly, we remand to the trial court for a determination of
whether, in the exercise of its discretion, the Bells' motion for default
judgment should be granted.
In
the event the trial court grants the Bells' motion for default judgment, the
issues in Employers Mutual's appeal will be moot. However, because the parties have briefed the issues in Employers
Mutual's appeal and because the trial court may deny the Bells' motion for default
judgment, we next address Employers Mutual's appeal.
STATUTE OF LIMITATIONS
Applicability of § 102.29(4) and (5), Stats.
Employers Mutual
contends the trial court erred in concluding that the Bells' action was not
barred by Iowa's two-year statute of limitations because this period was
extended by the provisions of § 102.29(4) and (5), Stats.[8]
Whether
§ 102.29(4) and (5), Stats.,
extends the Iowa two-year statute of limitations involves the interpretation of
a statute. In interpreting a statute,
our goal is to determine the intent of the legislature. Kelley Co. v. Marquardt, 172
Wis.2d 234, 247, 493 N.W.2d 68, 74 (1992).
To determine legislative intent, we first examine the language of the
statute. Id. If the language unambiguously sets forth the
legislative intent, that ends our inquiry and we do not look beyond the plain
language of the statute to search for other meanings. Rather, we simply apply the language to the case at hand. Id.
Section 102.29(4),
Stats., provides that when an
employer and a potential third-party defendant[9]
are insured by the same insurer, the employer's insurer shall promptly notify
the injured party and DILHR. In the
event the insurer does not comply with subsec. (4), and has not commenced a
third-party action within the three-year statute of limitations set forth in
§ 893.54, Stats.,
§ 102.29(5) extends the three-year statute of limitations under
§ 893.54 for an additional three years, during which time the injured
party may commence a third-party action.
See Wolff v. Sisters of St. Francis of the Holy Cross,
41 Wis.2d 594, 601, 164 N.W.2d 501, 505 (1969).
There
is no dispute that Employers Mutual did not promptly notify Bell and DILHR of
its dual role as required by § 102.29(4), Stats. However,
Employers Mutual argues that § 102.29(5) extends the statute of limitations
only when the applicable statute of limitations is § 893.54, Stats., not another state's statute of
limitations, such as Iowa's two-year statute of limitations for personal injury
actions. We agree.
Section
102.29(5), Stats., refers only to
§ 893.54, Stats., and its
three-year statute of limitations. It
does not refer to any other statute of limitations, either in general or
specific terms. The Bells concede that,
by virtue of § 893.07, Stats.,
the applicable statute of limitations in this case is not § 893.54, but
Iowa's two-year statute of limitations.
Therefore, the plain language of § 102.29(5) does not prevent
Employers Mutual from pleading the Iowa statute of limitations as a bar to the
Bells' action, despite its failure to comply with § 102.29(4), Stats.
This
conclusion is consistent with the supreme court's holding in Scott v.
First State Ins. Co., 155 Wis.2d 608, 456 N.W.2d 152 (1990). In Scott, the plaintiff who
sustained injuries as a minor in Alberta, Canada, brought an action in
Wisconsin after the expiration of Alberta's two-year statute of limitations,
made applicable to the action under § 893.07, Stats. Our supreme
court concluded that the Alberta statute of limitations was tolled under
§ 893.16(1), Stats.,
Wisconsin's tolling statute for persons under disability.[10] The court rejected the defendants'
contention that § 893.16(1) applied only to a Wisconsin cause of action,
not to a foreign cause of action under § 893.07(1), explaining:
The text of the statutes does not support the
defendants' contention. Section
893.16(1) makes no distinction between a domestic and foreign cause of action;
it expressly states that the tolling provisions apply to a person entitled to
bring an action who is a minor when the cause of action accrued.... Nothing in
sec. 893.16(1) renders the tolling provisions inapplicable to sec. 893.07(1) or
to a foreign jurisdiction's statute of limitations incorporated in the law of
Wisconsin through 893.07(1). On its
face sec. 893.16(1) applies to all causes of action accruing in favor of a
party under the age of eighteen at the time the action accrues.
Scott, 155 Wis.2d at 615, 456 N.W.2d at 155.
Unlike
§ 893.16(1), Stats.,
§ 102.29(5), Stats., does
not "[o]n its face ... appl[y] to all causes of action." Scott, 155 Wis.2d at 615, 456
N.W.2d at 155. Rather, it unambiguously
provides that it applies only to actions where the applicable statute of
limitations is § 893.54, Stats.
The
Bells point out that earlier versions of § 102.29(5), Stats., referred to foreign causes of
action and argue that the legislature must have inadvertently failed to include
§ 893.07, Stats., when
referring to § 893.54, Stats.,
in the current version of § 102.29(5).
However, since the statutory language is not ambiguous, we do not
consider the legislative history. Kelley
Co., 172 Wis.2d at 247, 493 N.W.2d at 74. Legislative history cannot be used to demonstrate that a statute,
unambiguous on its face, is ambiguous. State
v. Martin, 162 Wis.2d 883, 897 n.5, 470 N.W.2d 900, 905 (1991).
Constitutionality of § 102.29(5), Stats.
The Bells argue that if
§ 102.29(5), Stats., does
not apply to Wisconsin employees who are injured outside Wisconsin, it violates
their right to equal protection of the law.[11] The constitutionality of a statute is a
question of law, which this court reviews de novo. Guertin v. Harbour Assurance Co., 141 Wis.2d 622,
633, 415 N.W.2d 831, 835 (1987). There
is a strong presumption of constitutionality of statutes and a statute will be
sustained if there is any reasonable basis upon which the legislation may
rest. Id.
Because
the Bells do not claim that the statutes at issue affect a fundamental right,
we apply the rational basis test. Under
this test, "equal protection of the law is denied only where the
legislature has made [an] irrational or arbitrary classification.... The basic
test is not whether some inequality results from the classification, but
whether there exists any reasonable basis to justify the
classification." Guertin,
141 Wis.2d at 634, 415 N.W.2d at 836 (quoting Omernik v. State,
64 Wis.2d 6, 18-19, 218 N.W.2d 734, 742 (1974)).
An
equal protection argument similar to the one raised by the Bells was rejected
in Guertin and in Thimm. In Guertin, a Wisconsin resident employed by a
Wisconsin corporation was injured in Illinois during the course of his
employment. He brought an action in
Wisconsin after the Illinois two-year statute of limitations had expired, but
before the Wisconsin three-year statute of limitations had expired. The trial court held that under
§ 893.07, Stats., the
Illinois statute of limitations applied to bar his action. The supreme court affirmed. In rejecting the claim that § 893.07
unreasonably discriminates against Wisconsin residents who are involved in
out-of-state accidents contrary to the equal protection guarantees of the state
and federal constitutions, the court stated:
The only distinction made by this statute is between
persons, regardless of residence, who are injured inside and outside of the
state of Wisconsin. We conclude,
however, that this legislative classification rests on a rational basis. Those injured within the state are subject
only to Wisconsin's statutes of limitation, whereas those injured outside of
the state may be subject to more than one state's limitation statutes. Wisconsin's borrowing statute obviates
uncertainty where more than one statute of limitation might apply, protecting
all parties by the creation of a bright line rule which allows predictability
in an area previously fraught with confusion.
Guertin, 141 Wis.2d at 634-35, 415 N.W.2d at 836.
In
Thimm, a Wisconsin resident was injured in Illinois. After settling with the tortfeasor's insurer
for property damage, Thimm filed a personal injury action in Wisconsin after
the Illinois two-year statute of limitations had run. We rejected Thimm's contention that §§ 885.285 and 893.12, Stats.,[12]
interacted with § 893.07, Stats.,
to extend the statute of limitations for three years from the date of the
property settlement. We stated:
Because
Thimm's suit is a foreign cause of action, § 893.12, Stats., does not apply. We look to the Illinois law alone for a
statute extending limitations in event of a payment or settlement but find
none.
....
Thimm's
interpolation of the Wisconsin and Illinois statutes engrafts upon the Illinois
statute an extension which does not exist under Illinois law. It undercuts Guertin's
definition of a foreign cause of action by creating a new type of statute of
limitations, part Illinois and part Wisconsin.
Furthermore, Thimm's position would create an ambiguity in the clause
"and the foreign period of limitation which applies has expired" because
it is unclear whether the foreign law alone applies or whether it is to be
construed with the law of the forum to create a different period.
Thimm, 148 Wis.2d at 337-39, 434 N.W.2d at 844-45.
The
discussion in Guertin and in Thimm with respect to
§ 893.07, Stats., applies
here. Section 102.29(5), Stats., extends the statute of
limitations only for plaintiffs injured in Wisconsin. Like the legislative classification in Guertin,
that eliminates uncertainty when more than one statute of limitations might
apply, protecting all parties by the creation of a predictable bright line
rule. The Bells' interpretation would
create uncertainty because it would be unclear whether the foreign
jurisdiction's statute of limitations applies or whether it is to be construed
with the law of the forum to create a different period. It would create a new type of statute of
limitations, part Iowa and part Wisconsin.
This result would undercut the certain and predictable rule that the
"borrowed" foreign statute determines the applicable period of
limitation. See Scott,
155 Wis.2d at 619, 456 N.W.2d at 157; Thimm, 148 Wis.2d at
338-39, 434 N.W.2d at 845.
The
Bells also contend that, given the purpose of § 102.29(5), Stats., it makes no sense not to apply
it to foreign causes of action. The purpose of § 102.29(5) is to prevent
an injured party from being prejudiced by the inaction of the insurer where an
undisclosed conflict of interest exists.
Ortman v. Jensen & Johnson, Inc., 66 Wis.2d 508, 520,
225 N.W.2d 635, 642 (1975). There may
be good reasons to apply § 102.29(5) to foreign causes of action. But we have concluded that there is a
rational basis for not doing so. We are
therefore not at liberty to rewrite the plain language of the statute.
Amended Complaint
The Bells argue that
even if the Iowa two-year statute of limitations bars the claims made in their
original complaint, it does not bar the claim added in their amended
complaint--that Iverson Construction's safety superintendent in Platteville,
Wisconsin, was negligent in failing to establish and enforce certain safety
policies for Iverson Construction. The
amended complaint alleges that this negligent conduct occurred in Wisconsin,
and that this conduct was the cause of Bell's injuries. Therefore, according to the Bells,
Wisconsin's three-year statute of limitations applies to this claim. We disagree.
In
Guertin, the plaintiff who was injured in Illinois in a
semi-tractor accident sued the mechanic who maintained and serviced the
semi-tractor in Wisconsin. The supreme
court rejected plaintiff's argument that because his claim was based on
negligent conduct that occurred in Wisconsin, the Wisconsin statute of
limitations should apply, rather than the Illinois statute of limitations. The Guertin court concluded
that it is the place of injury that determines which statutes are to be
compared in establishing the appropriate statute of limitations, not the place
of the negligent conduct giving rise to the injury. Guertin, 141 Wis.2d at 631, 415 N.W.2d at 834-35.
Following
Guertin, we conclude that because Bell's injury occurred in Iowa,
and the Iowa statute of limitations is shorter than the Wisconsin statute of
limitations, the Iowa two-year statute of limitations applies to this claim
even though the negligent conduct occurred in Wisconsin.
DISCOVERY RULE
The
Bells contend that even if the Iowa two-year statute of limitations applies and
is not extended under § 102.29(5), Stats.,
their action was timely because under the "discovery rule" their cause
of action did not accrue until December 4, 1990. That was the date on which they received a certified copy of the
business automobile liability policy from Employers Mutual. According to the Bells, it was only after
they received this policy that they knew Employers Mutual had waived its
policy's co-employee exclusion and could be sued as a third-party.
We
find the Bells' argument unpersuasive.
First, the Bells have not cited any authority for support of their
position. Second, under
§ 807.12(1), Stats., the
Bells could have commenced an action against an unknown or unidentified entity
within the Iowa two-year statute of limitations, and then sought the identity
of the insurance company through discovery.[13] Finally, even if the discovery rule were
applicable, the Bells do not claim that they made any inquiry to determine
Iverson Construction's liability insurer until almost a year after the date of
the accident. The accident took place
on August 22, 1989. Bell was aware that
the only potential defendants were his co-employees, his employer and insurance
companies. But it was not until
August 7, 1990, that the Bells requested from Iverson Construction copies
of its insurance policies to determine the potential for a third-party action.
EQUITABLE ESTOPPEL
The Bells' equitable
estoppel claim is based on their contention that Employers Mutual withheld from
them notice of its dual role as worker's compensation carrier and third-party
liability carrier and thus withheld its identity as a potential third-party
defendant.
In
Johnson v. Johnson, 179 Wis.2d 574, 508 N.W.2d 19 (Ct. App.
1993), we stated the equitable estoppel test as follows:
The test of whether a party should be estopped from
asserting the statute of limitations is "whether the conduct and
representations ... were so unfair and misleading as to outbalance the public's
interest in setting a limitation on bringing actions." Additionally, our supreme court has stated
that the elements necessary to apply equitable estoppel include fraud or
inequitable conduct by the party asserting the statute of limitations and that
the aggrieved party failed to commence an action within the statutory period
because of reliance on the wrongful conduct.
Id. at 582, 508 N.W.2d at 21-22 (citations omitted; footnote omitted).
The
Bells have not presented any evidence that Employers Mutual acted in such an
unfair and misleading manner as to outweigh the public's interest in setting a
limit on bringing actions, or that their failure to file an action within the
Iowa two-year statute of limitations was caused by Employers Mutual's failure
to comply with § 102.29(4), Stats. The undisputed facts are that the Bells
requested copies of Iverson Construction's insurance policies on August 7,
1990. Attorney Robert Johns entered an
appearance on behalf of Employers Mutual regarding Bell's worker's compensation
claim on August 24, 1990. Attorney
Johns obtained copies of Employers Mutual's insurance policies issued to Iverson
Construction and sent certified copies of those policies to the Bells on
December 4, 1990. Approximately one
month later, on January 9, 1991, the Bells' attorney advised Attorney Johns
that the Bells believed they had a right to file a third-party action against
Employers Mutual. While the Bells had
until August 22, 1991, to file a third-party action against Employers Mutual in
order to fall within the Iowa two-year statute of limitations, the Bells did
not commence their third-party action against Employers Mutual until February
24, 1992.
Given
that the Bells had copies of Iverson Construction's insurance policies and
believed that they had a right to file a third-party action against Employers
Mutual over seven months prior to the expiration of the Iowa two-year statute
of limitations, we conclude, as a matter of law, that the Bells' failure to
timely commence their action was not caused by Employers Mutual's failure to
notify them of its dual role under § 102.29(4), Stats. As we stated
in Johnson, "litigants must inform themselves of applicable
legal requirements and procedures, and they cannot rely solely on their
perception of how to commence an action."
Johnson, 179 Wis.2d at 584, 508 N.W.2d at 23.
SUMMARY
We conclude that the
Bells properly served Employers Mutual with their amended complaint. Therefore, we reverse and remand for a
determination whether, in the exercise of its discretion, the Bells' motion for
default judgment should be granted. If
the trial court grants the Bells' motion, the issues in Employers Mutual's
appeal will be moot and judgment will be entered in the Bells' favor.
We
also conclude that in the event the trial court denies the Bells' motion for
default judgment, summary judgment must be entered in favor of Employers Mutual
because all claims contained in the amended complaint are barred by the Iowa
two-year statute of limitations.
By
the Court.—Judgment reversed
and cause remanded with directions.
No. 95-0301(D)
SUNDBY,
J. (dissenting). The
question on this appeal is whether a worker's compensation insurer who also
insures the negligent third party may assert a foreign statute of limitation
when it fails to give notice of the possible conflict, as required by
§ 102.29(4) and (5), Stats.[14] I conclude that it may not and therefore
dissent.
Subsections
(4) and (5) of § 102.29, Stats.,
create a bar against an insurer who has a duty to notify all parties and the
department of its possible conflict and does not from asserting any
statute of limitation. This is
consistent with the spirit and intent of the Worker's Compensation Act. This Act, created in 1911, constitutes a
compact between employers and employees and the state. Because the industrial revolution spawned so
many workplace accidents and lawsuits arising out of those accidents, the legislature
created a system of compensation for employees injured on the job. Worker's compensation became the employee's
exclusive remedy. In exchange, the
employee traded his or her right to sue the employer for work-related
accidents. That compact, however, did
not extend to third parties who injured an employee who was at the time
performing services for his or her employer.
Thus, the legislature created § 102.29, Stats., which is an exception to the exclusive remedy under
§ 102.03(2), Stats.
The
philosophy of third-party liability is that a person who has negligently
injured an employee shall not receive a windfall simply because the Act
protects the employee. However, the
cause of action under § 102.29, Stats.,
does not belong exclusively to the employee.
The employer who has paid or is obligated to pay a worker's compensation
claim under ch. 102 has the same right as the employee to make a claim or
maintain an action against a negligent third party for the employee's injury or
death. Section 102.29(1). If the department pays or is obligated to
pay a claim, the department also has the right to maintain an action against
the third party who causes an employee's injury or death. Regardless of who brings the action, if
there is a recovery, the proceeds are divided as provided under § 102.29(1).
It
occasionally happens that the worker's compensation insurance carrier also
insures the negligent third party.
Plainly, in that case, it would be to the insurer's benefit not to
initiate an action against its own insured.
Perhaps it could not under its contract with its insured. In that case, the legislature requires that
the insurer give notice of this conflict to all parties and the department so
that they may protect their third-party liability rights, including timely
beginning an action.
Because
the accident which injured the employee in this case occurred in Iowa, the
majority concludes that Iowa's two-year statute of limitations is made
applicable to this action by § 893.07, Stats.[15] What the majority fails to recognize is that
§ 102.29(4) and (5), Stats.,
operates as a statutory equitable bar to the insurer raising any statute
of limitations defense if it fails to give the notice required under
§ 102.29(4). By not giving notice
as required, the insurer failed to put the parties and the department on notice
that they would have to protect their own interests. We need not look to § 893.07 or the Iowa statute of
limitations because the insurer, which failed to give the notice required by
§ 102.29(4), cannot enforce any statute of limitation until six years from
the date of the employee's injury.
Because the majority fails to give effect to § 102.29(4) and (5), I
respectfully dissent.
[1] Section 893.07, Stats.,
provides:
(1) If an action is
brought in this state on a foreign cause of action and the foreign period of
limitation which applies has expired, no action may be maintained in this
state.
(2) If an action is
brought in this state on a foreign cause of action and the foreign period of
limitation which applies to that action has not expired, but the applicable
Wisconsin period of limitation has expired, no action may be maintained in this
state.
[2] Section 102.29, Stats., provides in part:
(4) If the employer
and the 3rd party are insured by the same insurer ... the employer's insurer
shall promptly notify the parties in interest and the
department....
(5) An insurer
subject to sub. (4) which fails to comply with the notice provision of that
subsection and which fails to commence a 3rd party action, within the 3 years
allowed by s. 893.54, may not plead that s. 893.54 is a bar in any action
commenced by the injured employe under this section against any such 3rd party
subsequent to 3 years from the date of injury, but prior to 6 years from such
date of injury....
[4] See note 1 for the text of
§ 893.07, Stats. It adopts the statute of limitations of
another jurisdiction where the injury sued upon occurred in that jurisdiction
and the "foreign" jurisdiction has a shorter period of limitations
than Wisconsin's. Dahlberg v.
Harris, 916 F.2d 443, 445 (8th Cir. 1990).
[5] Section 893.54, Stats., provides in part:
The following
actions shall be commenced within 3 years or be barred:
(1) An action to recover damages for injuries to
the person.
[6] Section 801.14(2), Stats., provides as follows:
Whenever under
these statutes, service of pleadings and other papers is required or permitted
to be made upon a party represented by an attorney, the service shall be made
upon the attorney unless service upon the party in person is ordered by the
court. Service upon the attorney or
upon a party shall be made by delivering a copy or by mailing it to the
last-known address, or, if no address is known, by leaving it with the clerk of
the court.... The first sentence of
this subsection shall not apply to service of a summons or of any process of
court or of any paper to bring a party into contempt of court.
[7] Section 802.09(1), Stats., provides:
A party may amend
the party's pleading once as a matter of course at any time within 6 months
after the summons and complaint are filed or within the time set in a
scheduling order under s. 802.10.
Otherwise a party may amend the pleading only by leave of court or by
written consent of the adverse party; and leave shall be freely given at any
stage of the action when justice so requires.
A party shall plead in response to an amended pleading within 20 days
after service of the amended pleading unless (a) the court otherwise orders or
(b) no responsive pleading is required or permitted under s. 802.01(1).
[9] Section 102.29(1), Stats., defines "third party" as any party against
whom the injured employee brings an action or makes a claim in tort for the
injury, other than the employer or the employer's worker's compensation
carrier.
[10] Section 893.16(1), Stats., provides that if a person entitled to bring an action
is under the age of eighteen when the cause of action accrues, the action may
be commenced within two years after the person reaches the age of majority.
[11] The Fourteenth Amendment to the United States
Constitution and article I, section 1 of the Wisconsin Constitution guarantee
equal protection of the laws.
[12] Section 893.12, Stats., provides that the period fixed for the limitation for
the commencement of actions, if a payment is made as described in
§ 885.285(1), Stats., shall
be either the period of time remaining under the original statute of
limitations or three years from the date of the last payment under
§ 885.285(1), whichever is greater.
[13] Section 807.12(1), Stats., provides in part:
When the name or a
part of the name of any defendant, or when any proper party defendant to an
action ... is unknown to the plaintiff, such defendant may be designated a
defendant by so much of the name as is known, or by a fictitious name ....
[14] Section 102.29, Stats., provides in part:
(4) If the
employer and the 3rd party are insured by the same insurer, or by the insurers
who are under common control, the employer's insurer shall promptly notify the
parties in interest and the department.
If the employer has assumed the liability of the 3rd party, it shall
give similar notice, in default of which any settlement with an injured employe
or beneficiary is void....
(5) An insurer
subject to sub. (4) which fails to comply with the notice provision of that
subsection and which fails to commence a 3rd party action, within the 3 years
allowed by s. 893.54, may not plead that s. 893.54 is a bar in any action
commenced by the injured employe under this section against any such 3rd party
subsequent to 3 years from the date of injury, but prior to 6 years from such
date of injury....
[15] Section 893.07, Stats., provides:
(1) If an
action is brought in this state on a foreign cause of action and the foreign
period of limitation which applies has expired, no action may be maintained in
this state.
(2) If an
action is brought in this state on a foreign cause of action and the foreign
period of limitation which applies to that action has not expired, but the
applicable Wisconsin period of limitation has expired, no action may be
maintained in this state.