John C. Hagen v. City of Milwaukee Employee's Retirement System Annuity and Pension Board

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2003 WI 56 SUPREME COURT CASE NO.: OF WISCONSIN 01-3198 COMPLETE TITLE: John C. Hagen, Plaintiff-Appellant-Petitioner, v. City of Milwaukee Employee's Retirement System Annuity and Pension Board, Defendant-Respondent. REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at: 258 Wis. 2d 301, 653 N.W.2d 772 (Ct. App. 2002-Unpublished) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: April 10, 2003 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Milwaukee Thomas P. Donegan June 18, 2003 JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: For the plaintiff-appellant-petitioner there were briefs by Michael T. Sheedy and Michael T. Sheedy & Associates, Milwaukee, and oral argument by Michael T. Sheedy. For the defendant-respondent there was oral argument by Maurita Houren, assistant city attorney, with whom on the brief was Grant F. Langley, city attorney. 2003 WI 56 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 01-3198 (L.C. No. 01 CV 3442) STATE OF WISCONSIN : IN SUPREME COURT John C. Hagen, FILED Plaintiff-Appellant-Petitioner, v. JUN 18, 2003 City of Milwaukee Employee's Retirement System Annuity and Pension Board, Cornelia G. Clark Clerk of Supreme Court Defendant-Respondent. REVIEW of a decision of the Court of Appeals. ¶1 DIANE S. SYKES, J. The question in Affirmed. this case is whether the circuit court can acquire personal jurisdiction over a defendant when the plaintiff does not serve the summons and complaint on the defendant, but, rather, mistakenly serves a nonparty in the same building, allegedly after having been directed to do so by a person in the defendant's office. The answer is no. ¶2 John Hagen filed a lawsuit against the City of Milwaukee Employes' Retirement System/Annuity and Pension Board (MERS) seeking certiorari review of its decision to terminate No. his disability benefits. 01-3198 Hagen's process server asserted in an affidavit that he attempted service of the summons and complaint at the MERS office in Milwaukee City Hall, but was told to go to the city clerk's office instead. The city clerk's office issued a receipt for the summons and complaint. ¶3 MERS is a separate political body from the City of Milwaukee and was never served with the summons and complaint. MERS filed an answer asserting lack of personal jurisdiction based on this uncorrected. defective MERS moved service, for summary but the judgment defect based on went the absence of personal jurisdiction, and the circuit court granted the motion. ¶4 The court of appeals affirmed. Personal jurisdiction over a body politic such as MERS may be obtained by service of the summons and complaint on an officer, director, or managing agent of the body politic, or substitute service on a "person who is apparently in charge of the office" of an officer, director, or managing agent of the body politic. See Wis. Stat. §§ 801.02(1) and 801.11(4)(a)(7) and (b)(1999-2000).1 Service on a nonparty, even where it occurs erroneously in reliance on the mistaken direction of a person in the office of the defendant, does not constitute service on the defendant. The motion for summary judgment based on the absence of personal jurisdiction was properly granted. I. FACTS AND PROCEDURAL HISTORY 1 All references to the Wisconsin Statues are to the 19992000 version. 2 No. ¶5 01-3198 For purposes of this review, the facts are taken from the complaint and affidavits submitted on the motion for summary judgment. John Hagen worked as a laborer in the City Milwaukee Department of Public Works for many years. he suffered an injury on the job. disability, subject to of In 1989, He retired in 1990 on duty periodic medical examinations to determine his continued eligibility for disability benefits. In 2000, MERS terminated Hagen's disability benefits following a medical reexamination. Hagen appealed the decision administratively, and in March 2001, MERS affirmed its original decision. ¶6 On April 19, 2001, Hagen filed a summons and complaint in Milwaukee County Circuit Court seeking certiorari review of MERS' termination of his disability benefits. MERS answered on June defense 7, 2001, asserting as an affirmative lack of personal jurisdiction based on Hagen's failure to serve MERS with an authenticated copy of the summons and complaint. The answer also asserted the affirmative defense of failure to state a claim upon which relief can be granted against "the City of Milwaukee, the party who was served in this matter." Hagen did not further attempt to effectuate service on MERS, even though he had 41 days left in which to do so, pursuant to Wis. Stat. § 801.02(1). ¶7 again On September 10, 2001, MERS moved for summary judgment, asserting the failure of service. absence of personal jurisdiction due to MERS submitted an affidavit of Anne M. Bahr, its Secretary and Executive Director, asserting that she 3 No. 01-3198 is the officer designated to accept service of process on behalf of MERS, and that MERS had never been served with a summons and complaint. MERS also filed an affidavit of Kathleen Marquardt, a staff assistant in the city clerk's office, asserting that the city clerk's office, located in Room 205 of City Hall, accepts service of process for the City of Milwaukee only, not for any other municipal entity. ¶8 Hagen submitted an affidavit of process server Fred Meier, who asserted that on April 27, 2001, he went to Milwaukee City Hall to serve MERS. Meier stated in his affidavit that when he went to the MERS office in City Hall Room 603, the person who greeted him told him that process "must be served at the city clerk's office." Meier further stated that he proceeded to the city clerk's office where he was greeted by Kathy Marquardt, who "accepted the paper and also face stamped my return copy of the summons. At no time did the city clerk's office state that this was not accepted by them." ¶9 MERS filed a supplemental affidavit of Bahr describing the office procedure for acceptance of service of process and asserting that MERS' "front office personnel [have] no knowledge of ever referring anyone to the City Clerk's office for acceptance of service." ¶10 The circuit court, the Honorable Thomas P. Donegan, granted the motion for summary judgment and dismissed the case. The court of appeals affirmed. We accepted affirm. II. STANDARD OF REVIEW 4 review and now No. ¶11 We judgment court. review the de novo, using circuit the court's same grant methodology as 01-3198 of summary the circuit Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315-17, 401 N.W.2d 816 (1987). Summary judgment is granted when it is clear that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Wis. Stat. § 802.08(2). dispute regarding the precise There are some facts in circumstances surrounding service of process on the city clerk's office. Hagen's version of the facts to be true, the Even accepting however, summary judgment dismissing the case is required as a matter of law. III. ANALYSIS ¶12 A circuit court obtains personal jurisdiction over a defendant when the defendant is served with a summons in the manner prescribed by the statutes. Heaston v. Austin, 47 Wis. 2d 67, 70-71, 176 N.W.2d 309 (1970). The plaintiff has the burden to prove compliance with statutory service requirements, that is, to establish that the defendant was properly served and is therefore subject to the court's jurisdiction. Brody Seating Co., 71 Wis. 2d 424, 427-28, Danielson v. 238 N.W.2d 531 (1976). ¶13 Failure defendant by to obtain statutorily personal proper jurisdiction service of over process is the a fundamental defect fatal to the action, regardless of prejudice. Am. Family Mut. Ins. Co. v. Royal Ins. Co., 167 Wis. 2d 524, 534-35, 481 N.W.2d 629 (1992). of the pendency of the "Even if defendant actually knew action, 5 this is not equivalent to No. service." Heaston, 47 Wis. 2d at 71. "[W]hen a 01-3198 statute prescribes how service is to be made, the statute determines the matter." Punke v. Brody, 17 Wis. 2d 9, 13, 115 N.W.2d 601 (1962); see also Gangler v. Wis. Elec. Power Co., 110 Wis. 2d 649, 329 N.W.2d 186 (1983). Thus, the threshold question in a dispute over the adequacy of service is whether the statutory procedures have been met. Keske v. Square D Co., 58 Wis. 2d 307, 311-12, 206 N.W.2d 189 (1973). ¶14 The general statutory requirements for commencement and service of a civil action are contained in Wis. Stat. § 801.02(1): 801.02 Commencement of action. (1) A civil action in which a personal judgment is sought is commenced as to any defendant when a summons and a complaint naming the person as defendant are filed with the court, provided service of an authenticated copy of the summons and of the complaint is made upon the defendant under this chapter within 90 days after filing. Wis. Stat. § 801.02(1)(emphasis added)(applicable to certiorari complaints pursuant to Wis. Stat. § 801.02(5)). Accordingly, Hagen had 90 days after filing his lawsuit to serve MERS with an authenticated copy of the summons and complaint. ¶15 MERS is a political corporation.2 The specific statutory requirements for service of process for purposes of obtaining personal jurisdiction over political corporations are contained in Wis. Stat. § 801.11(4): 2 See Milwaukee City Charter § 36-09-6 ("The retirement system shall have all of the powers and privileges of a corporation, as enumerated in chs. 180 and 182, Wis. Stats."). 6 No. 01-3198 801.11 Personal jurisdiction, manner of serving summons for. A court of this state having jurisdiction of the subject matter and grounds for personal jurisdiction as provided in s. 801.05 may exercise personal jurisdiction over a defendant by service of a summons as follows: . . . . (4) OTHER POLITICAL CORPORATIONS OR BODIES POLITIC. (a) Upon a political corporation or other body politic, by personally serving any of the specified officers, directors, or agents: . . . . 7. If against any other body politic, director, or managing agent thereof. an officer, (b) In lieu of delivering the copy of the summons to the person specified, the copy may be left in the office of such officer, director or managing agent with the person who is apparently in charge of the office. Wis. Stat. § 801.11(4)(a) and (b). ¶16 MERS is a separate political body from the City of Milwaukee.3 Therefore, Hagen was required to serve an officer, director, or managing agent of MERS (not an officer, director, or managing agent of the City of Milwaukee) before the circuit court could statute exercise allows for personal substitute jurisdiction service on over "the MERS. person The who is apparently in charge of the office" of an officer, director, or 3 See, e.g., Milwaukee City Charter § 36-15-1 ("The general administration and responsibility for the proper operation of the retirement system and for making effective the provisions of this act are hereby vested in an annuity and pension board."). Boards and commissions that operate independently are subject to direct judicial proceedings as "bodies politic" within Wis. Stat. § 801.11(4)(a)(7). Watkins v. Milwaukee Cty. Civ. Serv. Comm'n, 88 Wis. 2d 411, 417-18, 276 N.W.2d 775 (1979). 7 No. 01-3198 managing agent of a political corporation or other body politic. Wis. Stat. § 801.11(4)(b). The statute does not allow for substitute service on a separate and distinct nonparty political corporation. ¶17 The statutory language governing service of process on business corporations generally parallels the language in Wis. Stat. § 801.11(4)(b) governing service of process on political corporations. See Wis. Stat. § 801.11(5)(a). Wisconsin Statute § 801.11(5)(a), like its counterpart subsection (4)(b), allows substitute service on "the person who is apparently in charge of the office" of an officer, director, or managing agent of a corporate defendant. Id. We have interpreted this phrase to allow service on a person whom the process server reasonably believed, under the circumstances, to be in charge of the office of an officer, director, or managing agent of the corporate defendant. ¶18 In Keske, the process server went to the offices of the defendant company and asked to see an officer, director, or managing agent of the company. Keske, 58 Wis. 2d at 309. When told none was available, he asked to see the person in charge of the office. Id. The receptionist directed the process server to the company's director of industrial relations, who, although not in fact "in charge," nevertheless accepted service. 310. "not Id. at We affirmed the circuit court's conclusion that it was unreasonable" under these circumstances for the process server to infer that the director of industrial relations was "apparently in charge" of the office of an "officer, director or 8 No. managing agent" statute. Id. at 314-15. ¶19 675, the company within the meaning of the In Horrigan v. State Farm Insurance Co., 106 Wis. 2d 317 office of 01-3198 N.W.2d of the 474 (1982), defendant the process insurance server company receptionist that he had a summons to serve. to the informed and went the Id. at 678-79. The receptionist told the process server to "'take a seat' and that she would get someone to receive the papers." Id. at 679. Soon after, a man appeared from the interior offices and entered Id. Assuming without further inquiry the office waiting room. that this man was the person the receptionist had called for, the process server delivered the summons to him. ¶20 Id. We held in Horrigan that "the statute requires that the facts and circumstances surrounding the service must be such that a served reasonable process the person server apparently in would conclude charge of the that office he of has an officer, director or managing agent of the corporation to be served." Id. at 677. We circumstances surrounding the concluded service that in the Horrigan facts and established the process server's "reasonable belief" that the person he had served at the defendant insurance charge, authorized to accept service. ¶21 company was the person in Id. at 684. These cases stand for the proposition that personal jurisdiction over a corporate defendant may be acquired if the facts demonstrate that in effectuating substitute service on "the person who is apparently in charge of the office" of an officer, director, or managing 9 agent of the defendant, the No. 01-3198 process server reasonably but mistakenly serves a person who appears to be, but in fact is not, "in charge" of that office. These cases jurisdiction do not can stand be for acquired the by proposition service on a that personal separate and distinct nonparty, even where the nonparty service occurs by virtue of the misdirection of the process server by a person in the defendant's office. ¶22 The court of appeals has twice refused to extend personal jurisdiction over defendants in cases in which service on the wrong entity is attributable to a process server who has been misdirected. In Gomez v. Labor & Industry Review Commission, 153 Wis. 2d 686, 451 N.W.2d 475 (Ct. App. 1989), the plaintiff attempted to serve a summons and complaint seeking judicial review of a decision of the Labor and Industry Review Commission (LIRC) at the Watertown job services office of the Department of Industry, Labor, and Human Relations (DILHR). at 688. summons Id. The process server was directed to and did serve the and complaint in the Madison compensation division of DILHR. office of Id. at 688-89. the worker s The court of appeals upheld the circuit court's dismissal of the case based on the failure to serve LIRC. Id. at 687-88. The court of appeals concluded that the process server "did not serve the papers on a person authorized to accept them; indeed, she did not even serve them on an employee of the commission, but on a receptionist in the office of a related, but very different, agency." Id. at 692. 10 No. ¶23 01-3198 The court of appeals reached a similar conclusion in Bar Code Resources v. Ameritech Information Systems, 229 Wis. 2d 287, 599 N.W.2d 872 (Ct. App. 1999). There, the contract between the parties specified that defendant Ameritech's agent for service of process was its vice-president and general counsel, located on the 23rd floor of its office building in Chicago. Id. at 289-90. The process server approached the security desk at the Ameritech building in Chicago and stated that he had a summons and complaint to serve on Ameritech. at 289. Id. The security manager, an employee of Illinois Bell, an Ameritech subsidiary, said he was authorized to accept service, and the process server served him. ¶24 Id. The court of appeals concluded that service on the Illinois Bell security manager, "a person not even in the employ of the targeted corporation," was insufficient to satisfy the statutory requirements defendant Ameritech. for personal Id. at 294-95. jurisdiction over the The court held that the place of service the office of a corporate officer, director, or managing agent was an objective element of the statute, not subject to inquiries reasonable belief. plaintiff had not about the Id. at 292. established requirement of the statute. process server's subjective The court concluded that the compliance Id. at 294-95. with this objective Service on a person "apparently in charge" of the wrong office is insufficient, even if it is based upon a process server's reasonable belief in the propriety of service. 11 No. ¶25 01-3198 Accordingly, while the statute allows for reasonable mistakes regarding the person "who is apparently in charge of the office" of an officer, director, or managing agent of the defendant, it does not allow for mistaken service on a person in the office of a nonparty to the litigation, regardless whether the mistake could be considered reasonable. served neither representatives. the As defendant in Gomez, MERS the nor Here, Hagen any plaintiff of here "related, but very different" governmental agency. of its served a Hagen was placed on notice of the defective service by MERS' answer, but did not correct it, even though ample time remained in which to do so. ¶26 Hagen has not requirements of Wis. Stat. demonstrated §§ 801.02(1) compliance and with 801.11(4). the The circuit court did not acquire personal jurisdiction over MERS, and therefore properly granted summary judgment dismissing the complaint. By the court.-The decision affirmed. 12 of the court of appeals is No. 1 01-3198

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