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Borrowing statute includes statutes of repose

Prosser

“Wenke’s attempt to commence this action in Wisconsin epitomizes forum shopping, and validating his action would disregard one of the clear purposes of sec. 893.07.”

Hon. David T. Prosser
Wisconsin Supreme Court

The Wisconsin Supreme Court held on July 7 that its decision in Landis v. Physicians Insurance Co. (2001), functionally overruled Leverence v. United States Fidelity & Guaranty (Ct. App. 1990), which distinguished statutes of limitation from statutes of repose in the application of Wisconsin’s borrowing statute.

Wisconsin’s borrowing statute, sec. 893.07(1), provides, “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.”

In 1997, Martin G. Wenke’s right arm was severely injured while he was attempting to remove hay from the front end of a baler designed and manufactured by Gehl Company. The injury occurred in Iowa, where Wenke was a resident.

Gehl’s principal business operations are in West Bend, Wisconsin, and the baler was originally sold by Gehl to another Iowa resident in May 1981. Wenke commenced a products liability and negligence action in Wisconsin state court in 1999.

Gehl moved for summary judgment, arguing that Iowa’s 15-year statute of repose for products liability actions, combined with Wisconsin’s borrowing statute, bars the suit.

Washington County Circuit Court Judge Richard Becker denied the motion, citing Leverence v. U.S. Fidelity & Guaranty, 158 Wis.2d 64, 462 N.W.2d 218 (Ct.App.1990), which held that the borrowing statute only applies to statutes of limitation, not repose.

After the Wisconsin Supreme Court decided Landis v. Physicians Ins. Co., 2001 WI 86, 245 Wis.2d 1, 628 N.W.2d 218 (holding that the legislature includes statutes of repose within its ambit when it uses the term, “statute of limitations”), Gehl moved for reconsideration, and Judge Patrick J. Faragher, who had been reassigned to the case, granted the motion and dismissed the case.

The court of appeals certified the case to the Supreme Court, but, sitting with only six justices, the court divided equally, and remanded the case to the court of appeals.
On remand, the court of appeals affirmed the circuit court’s decision to dismiss the action, in a published decision, reported at 2003 WI App 189, 267 Wis.2d 221, 669 N.W.2d 789.

The Supreme Court again accepted review, and this time, affirmed the lower courts, in a decision by Justice David T. Prosser. Justice N. Patrick Crooks wrote a concurring opinion, joined by Justice Jon P. Wilcox, and Justice Ann Walsh Bradley dissented, in an opinion joined by Chief Justice Shirley S. Abrahamson.

History

In Leverence, the court of appeals held, “A period of limitation 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. In contrast, a period 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, 158 Wis. 2d at 92.

In so holding, the court quoted a federal case interpreting sec. 893.07, Beard v. J.I. Case Co., 823 F.2d 1095, 1097 n.1 (7th Cir.1987). Both cases held that the statute does not borrow foreign statutes of repose.

Since Leverence, however, the Wisconsin Supreme Court issued decisions contradicting that analysis, but in the medical malpractice context, rather than applying sec. 893.07. Examining the reasoning in Beard and Leverence in retrospect, in light of Landis, the court concluded that the reasoning in Leverence and Beard was incorrect.

One of the main concerns in Beard, and then adopted in Leverence, was that to interpret the statute otherwise would run afoul of Article I, Section 9 of the Wisconsin Constitution — the right to remedy clause. However, those concerns were settled in Aicher v. Wisconsin Patients Compensation Fund, 2000 WI 98, 237 Wis.2d 99, 613 N.W.2d 849.

Thus, the court concluded, “Without the concern about the effect of Article I, Section 9 on the constitutionality of statutes of repose, the foundation of the Beard decision largely disappears, and Leverence’s reliance on that decision falls accordingly.”

The court then noted that much of the analysis in Landis is equally applicable to the case at bar: The fifth edition of Black’s Law Dictionary did not distinguish between statutes of repose and limitation; “the phrase ‘statute of repose’ is judicial terminology and is not featured in legislative lingo”; and when the legislature uses the term “statutes of limtiation,” it generally contemplates all limitation statutes, including statutes of repose.

Quoting Justice Bradley’s concurrence to Landis, the court iterated, “the term ‘statute of repose’ is not part of the legislature’s lexicon, but rather is a judicially created label used to describe a particular type of limitation on action.” Landis, 245 Wis. 2d 1, par. 67 (Bradley, J., concurring).

Thus, the court found that the court of appeals in Leverence erred when it held that the term “statute of limitation” unambiguously excludes statutes of repose. The court concluded, “The rationale of Leverence was wiped out by the Landis and Aicher decisions. Even if we were to determine that sec. 893.07 properly applies only to foreign statutes of limitation and not foreign periods of repose, we could not reach that conclusion on the bases advanced in Leverence.”

Legislative Acquiescence

Turning to the legislative history, the court began by considering Wenke’s legislative acquiescence argument — that because the legislature has not acted to overturn the decision in Leverence, it has acquiesced in its reasoning.

What the court held

Case: Wenke v. Gehl Company, No. 01-2649.

Issue: Does Wisconsin’s borrowing statute adopt foreign statutes of repose, or just foreign statutes of limitation?

Holding: Both. When the legislature uses the term, “statute of limitation,” they intend to include statutes of repose as well.

Counsel: Lynn R. Laufenberg, Milwaukee, for appellant; Francis H. LoCoco, Daniel J. LaFave, Milwaukee, for respondent.

Rejecting the argument, the court reasoned, “Confirming approval by positive demonstration is more persuasive than ‘evincing’ approval by doing nothing. Numerous variables, unrelated to conscious endorsement of a statutory interpretation, may explain or cause legislative inaction. These variables include the possibility that the legislature did not have its attention directed to a decision, had other priorities, or was passive or indifferent because the legislators who authored the original legislation were no longer present.”

The court added, “In any event, a subsequent legislature’s approval of a judicial construction is not as probative as the intent of the legislature when it enacted the statute.”

The court listed several reasons for not finding that the legislature has approved the interpretation in Leverence via inaction: “First, the presumption that the legislature has adopted a judicial interpretation is entitled to less weight when there is nearly complete inaction by the legislature. See Reiter v. Dyken, 95 Wis. 2d 461, 471, 290 N.W.2d 510 (1980). Our legislature has not amended or reenacted sec. 893.07 since its adoption in 1980. We have not been advised of any bill that was introduced to substantively amend this section or address the issue since Leverence was decided in 1990. Second, because legislators have not generally focused on the nuanced concept of statutes of repose, Landis, 245 Wis. 2d 1, par. 61 n.13, we question whether the court of appeals decision would have generated much discussion on point.

Third, this court’s pronouncements in pre-Aicher decisions regarding the questionable constitutionality of statutes of repose may have dissuaded legislators from correcting any error in the court of appeals’ interpretation of sec. 893.07, if they had taken note of it. Finally, the primary holdings from Leverence, which may in fact have garnered the attention of legislators, dealt with issues that greatly overshadowed the question of whether sec. 893.07 borrows foreign statutes of repose. Under these circumstances, we assign little weight to inaction by the legislature.”

Accordingly, the court decided to view the issue as one of first impression, giving no value to the analysis in Leverence or the inaction of the legislature since it was decided.

In doing so, the court found that the purpose of the statute was furthered by reading the reference to statutes of limitation to include statutes of repose.

The court reasoned, “Wenke is attempting to sustain claims on a cause of action that had been extinguished under Iowa law. Allowing Wenke’s claim to go forward in Wisconsin would encourage forum shopping and would provide a non-resident of Wisconsin with a longer limitation period in which to bring a suit than he or she would have in the state in which the injury occurred. As this court explained when it first interpreted sec. 893.07, ‘The manifest intent of the legislature in enacting this borrowing statute was to adopt the shortest possible limitation period for actions litigated in this state potentially subject to more than one statute of limitations.’ Guertin, 141 Wis. 2d at 631 (emphasis added). In making this statement, we expressly noted that a reduction of forum shopping is one of the policies advanced by the borrowing statute. Id. Wenke’s attempt to commence this action in Wisconsin epitomizes forum shopping, and validating his action would disregard one of the clear purposes of sec. 893.07.”

Judicial Council

The court did acknowledge that the Judicial Council Committee Notes to sec. 893.05 do appear to support Wenke’s argument that statutes of repose are excluded from sec. 893.07.

The Note states: “This new section is a codification of Wisconsin case law. See Maryland Casualty Company v. Beleznay, 245 Wis. 390, 14 N.W.2d 177 (1944), in which it is stated at page 393: ‘In Wisconsin the running of the statute of limitations absolutely extinguishes the cause of action for in Wisconsin limitations are not treated as statutes of repose. The limitation of actions is a right as well as a remedy, extinguishing the right on one side and creating a right on the other, which is as of high dignity as regards judicial remedies as any other right and it is a right which enjoys constitutional protection.’”

However, the court found that the statement, “in Wisconsin limitations are not treated as statutes of repose” does not support Wenke’s argument, finding that the meaning of the phrase “statute of repose” has changed over the years.

Reviewing numerous older cases from Wisconsin and other jurisdictions, the court concluded that, at the time the statement was included in the Note, it merely meant that, in Wisconsin, a statute of limitation does not merely extinguish a plaintiff’s remedy, but creates and destroys substantive rights.

Accordingly, the court held that the statement does not affect its interpretation that statutes of repose are subject to sec. 893.07(1).

Sunbursting

Finally, the court rejected Wenke’s argument that its decision to overrule Leverence should be applied prospectively only (sunbursting), applying the three-factor test of Che
vron Oil Co. v. Huson, 404 U.S. 97, 106 (1971): (1) whether the decision “establish[es] a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed”; (2) whether retroactive application would further or retard the operation of the new rule; and (3) whether retroactive application could produce substantial inequitable results.

Turning to the first factor, the court acknowledged that Wenke might reasonably have relied on Leverence when he initiated the action, but found, “reliance on an old rule in filing a lawsuit is not the type of reliance of which this court is concerned when deciding whether sunbursting is warranted.”

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The court iterated, “‘When tort law is changed, the court is concerned about exposing many individuals and institutions to liability who would have obtained liability insurance had they known they would no longer enjoy immunity.’ The reliance here is very different and does not overcome the presumption of retroactive application.”

Turning to the other factors, the court found that retroactive application would further, rather than retard, operation of the interpretation announced in the case, and that no substantial inequity would result from retroactive application. Accordingly, the court affirmed the lower courts in holding that Landis effectively overruled Leverence.

Other Opinions

Justice Crooks wrote a concurring opinion, joined by Justice Wilcox, stating that, although they believe Landis was incorrectly decided, it is binding precedent, and the reasoning of the decision requires that sec. 893.07(1) also be applied to both statutes of limitation and statutes of repose.

Justice Bradley dissented, in an opinion joined by Chief Justice Abrahamson, concluding that the Judicial Council Committee Note, by stating, “in Wisconsin limitations are not treated as statutes of repose,” clearly demonstrates legislative intent.

Bradley wrote, “There may be all sorts of good policy reasons, which the majority carefully sets forth, why statutes of repose should be included in sec. 893.07. It may be wise for Wisconsin to borrow other states’ statutes of repose as well as statutes of limitations. However, these policy arguments, made from the vantage point of 2004, are no substitute for the legislative intent as set out at the time the statute was enacted in 1979. Even strong policy arguments cannot override clear legislative intent.”

The dissent added, “There may be an interesting and complex history of the evolution of statutes of repose. The majority skillfully charts the subtle shifts in meaning over time, drawing on extensive case law and multiple editions of legal dictionaries. Although the analysis provides an informative tour of a wide range of case law from many jurisdictions, there is no evidence that the Wisconsin legislature embraced or even grasped what the majority admits is a ‘largely unperceived shift’ in the meaning attached to the phrase ‘statute of repose.’ Even a sophisticated appreciation of this subtle and ‘largely unperceived’ shift in legal concepts cannot override clear legislative intent.”

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David Ziemer can be reached by email.

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