By Prof. Daniel D. Blinka & Prof. Thomas J. Hammer

| Attorney Fees | Taxation | Torts |

Timeliness - "Costs" - Wis. Stat. section 806.06(4)

Hartman v. Winnebago County, No. 96-0596 (filed 26 Feb. 1998)

In 1990 the plaintiffs, recipients of general relief, filed an action alleging that the county's welfare program violated federal law. The county changed its policies in 1993 and the plaintiffs demanded attorney fees. The circuit court denied the request but the court of appeals reversed.

The supreme court, in an opinion authored by Justice Crooks, reversed the court of appeals and held that the plaintiffs' request was untimely. First, the court concluded that in actions brought under 42 U.S.C. section 1988(b), requests for attorney fees constitute "costs" and are controlled by section 806.06(4) of the Wisconsin Statutes. Under section 806.06(4), the time limitation for "perfecting" the judgment (that is, taxing and inserting costs) turns on which party seeking costs has notice that the judgment is entered. If the party causes the judgment to be entered, the 30-day time limit begins on the date of entry. Otherwise, the 30-day limit begins on the date of notice of entry of judgment.

The court cautioned that its "holding today does not negate the recognition that an award of attorney's fees based upon the status of a prevailing party is a consideration separate from the underlying merits of the cause of action. In addition, our decision does not prohibit the parties from stipulating to postpone the issue of attorney's fees or seeking to stay the proceedings pursuant to Wis. Stat. sec. 806.08. Hence, we do not restrict a circuit court's ability to economize its time and postpone fee issues pending the resolution of the underlying merits of a claim on appeal."

In this case the plaintiffs' motion was untimely. They asserted entitlement based upon the county's recission of its policies in May 1991; therefore, they should have "taxed and inserted costs in the Nov. 17, 1993, judgment based on the catalyst theory [that is, the lawsuit served as a "catalyst" for defendant's actions] within 30 days of receipt of the Nov. 19, 1993, Notice of Entry of Order." The plaintiffs instead waited until November 1995 to file their motion for attorney fees.

Property Taxes - Reassessments - Uniformity Clause

Noah's Ark Family Park v. Board of Review of the Village of Lake Delton, No. 96-1074 (filed 26 Feb. 1998)

In 1994 Noah's Ark, a recreational water park located in Lake Delton near Wisconsin Dells, was assessed at $4.8 million. In March of that year it was sold. The real estate transfer return reported the total value of the park at $22.5 million. In July 1995 the assessor for the Village of Lake Delton reassessed Noah's Ark at $l8 million. He also reassessed Familyland, another water park nearby, at $4 million, which was an increase of $2.4 million from its 1994 assessment. However, other commercial properties in the village that had been sold recently for sums far in excess of their assessed value were not reassessed for property tax purposes.

When Noah's Ark objected to the reassessment before the local Board of Review, the assessor testified that he had not made adjustments for other commercial properties that had recently been sold because Noah's Ark and Familyland were unique properties. He stated that he did not consider the other commercial properties to be comparable to the water parks. The board affirmed the assessment of Noah's Ark but reduced Familyland's assessment to its 1994 assessment. The circuit court affirmed the board's action.

The court of appeals reversed the circuit court. See Noah's Ark Family Park v. Board of Review of the Village of Lake Delton, 210 Wis. 2d 302, 565 N.W.2d 230 (Ct. App. 1997). In a unanimous decision authored by Chief Justice Abrahamson, the supreme court affirmed the court of appeals and adopted the opinion of the court of appeals as the opinion of the supreme court, with limited supplementation.

The issue before the supreme court was whether the assessor's singling out of Noah's Ark for reassessment based upon its recent sale, while intentionally refusing to reassess other commercial properties that had been recently sold, constituted an improper, arbitrary mode of assessment in violation of the uniformity clause of the Wisconsin Constitution (Article VIII, section 1), when the refusal to reassess other properties was based upon an erroneous view of the law.

The supreme court agreed with the conclusion of the court of appeals that the 1995 assessment of Noah's Ark violated the uniformity clause. In so holding, it rejected the Board of Review's assertion that in making a uniformity challenge, Noah's Ark had to show that the undervalued properties were comparable properties. There is no requirement that a taxpayer making a uniformity challenge must always show that the undervalued properties are "comparable properties." Because the claim of undervaluation of the properties in this case was based upon evidence of recent sales, comparability was not necessary to prove undervaluation.

In this case the Board of Review singled out Noah's Ark from all other commercial properties in the Village of Lake Delton and assessed it under the erroneous belief that it could single out a property if there were no comparable properties. The court concluded that the singling out of one commercial property and reassessing it based upon a recent sale price while ignoring recent sales of other commercial properties was based on an erroneous view of the law and was an improper, arbitrary mode of assessment in violation of the uniformity clause of the Wisconsin Constitution.

The court remanded the matter with directions to the Board of Review to reassess Noah's Ark for 1995 by disregarding evidence of the 1994 sale.

Economic Loss Doctrine - Remote Commercial Purchasers

Daanen & Janssen Inc. v. Cedarapids Inc., No. 97-1320-CQ (filed 26 Feb. 1998)

This case was before the Wisconsin Supreme Court on a certified question from the U.S. Court of Appeals for the Seventh Circuit. The certified question was as follows: In the absence of privity, does the economic loss doctrine bar a remote commercial purchaser from recovering economic losses from a manufacturer under theories of strict liability and negligence? The supreme court answered the certified question in the affirmative.

The economic loss doctrine is a judicially created doctrine providing that a commercial purchaser of a product cannot recover from a manufacturer, under the tort theories of negligence or strict products liability, damages that are solely "economic" in nature. The term "economic loss" ordinarily means damage to the product itself or monetary loss caused by the defective product, which does not cause personal injury or damage to other property.

In a unanimous decision authored by Justice Steinmetz, the court identified three important policies underlying the economic loss doctrine. First, application of the doctrine is justified to maintain the distinct functions of tort and contract law. Second, the doctrine serves to protect commercial parties' freedom to contract. Third, the doctrine encourages the party with the best understanding of the attendant risks of economic loss - the commercial purchaser - to assume, allocate, or insure against the risk of loss caused by a defective product.

After reviewing these policies and applying them to the case before it, the court concluded that in Wisconsin the economic loss doctrine precludes a commercial purchaser from recovering in tort from a manufacturer for solely economic losses, regardless of whether privity of contract exists between the parties.

This column summarizes all decisions of the Wisconsin Supreme Court. Prof. Daniel D. Blinka and Prof. Thomas J. Hammer invite comments and questions about the digests. They can be reached at the Marquette University Law School, 1103 W. Wisconsin Ave., Milwaukee, WI 53233, (414) 288-7090.

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