Ann Cattau v. National Insurance Services of Wisconsin, Inc.
926 N.W.2d 756
Wis.2019Background
- Sixty-one retired Neenah teachers/administrators sued MidAmerica and National Insurance Services (NIS), alleging mismanagement of their retirement benefits and asserting claims including breach of fiduciary duty, negligent and strict responsibility misrepresentation, and negligence.
- Defendants moved to dismiss for failure to state a claim under Wis. Stat. §802.02(1)(a).
- The circuit court dismissed the complaint; the court of appeals affirmed, holding that Data Key Partners v. Permira Advisers LLC created a heightened "plausibility" pleading standard in Wisconsin and that plaintiffs failed to meet it.
- The Wisconsin Supreme Court granted review to decide whether Data Key altered Wisconsin pleading law and whether the complaint stated a claim under the correct standard.
- The Court unanimously held Data Key did not change the pleading standard articulated in Strid v. Converse, but the justices were evenly divided on whether the complaint stated a claim under the combined Data Key/Strid standard.
- Because of the 4–4 split on the merits, the court affirmed the court of appeals' judgment by an equally divided court (no precedential majority on the merits).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Data Key change Wisconsin's pleading standard to a Twombly-style plausibility test? | Data Key should not be read to heighten pleading beyond Strid; Strid remains controlling. | Defendants argued Data Key adopted Twombly's heightened plausibility standard, making plaintiffs' complaint deficient. | Court unanimously: Data Key reaffirmed, not changed, Strid; no new heightened standard. |
| What is the correct pleading inquiry under Wisconsin law? | Pleading requires a short, plain statement showing entitlement to relief; courts accept well-pleaded facts and reasonable inferences but not conclusions. | Same formulation emphasizing Data Key/Twombly parallels. | Court: Pleading standard follows §802.02(1)(a), Strid, and Data Key—in practice accept well-pleaded facts, reject bare legal conclusions. |
| Did plaintiffs plead facts sufficient to state claims (breach, misrepresentation, negligence)? | Complaint alleged facts showing defendants mismanaged retirement benefits and caused harm, satisfying elements under substantive law. | Allegations were conclusory or formulaic recitations of elements and failed to plead necessary factual detail. | Court equally divided on whether facts sufficed; thus judgment of court of appeals affirmed by an evenly divided court. |
| What is effect of an evenly divided Supreme Court on the judgment below? | (Plaintiffs) A reversal would require a majority; otherwise the lower-court result stands. | (Defendants) Affirmance stands if no majority reverses. | An equally divided court affirms the court of appeals' judgment without creating a controlling statewide precedent on the merits. |
Key Cases Cited
- Data Key Partners v. Permira Advisers LLC, 356 Wis. 2d 665, 849 N.W.2d 693 (2014) (reaffirmed pleading principles requiring well-pleaded facts and rejecting bare legal conclusions)
- Strid v. Converse, 111 Wis. 2d 418, 331 N.W.2d 350 (1983) (Wisconsin's long-standing standard: plead sufficient facts to show entitlement to relief)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (U.S. Supreme Court decision articulating the federal plausibility pleading inquiry referenced in discussions of Wisconsin law)
- Wingra Redi-Mix, Inc. v. Burial Sites Pres. Bd., 381 Wis. 2d 601, 912 N.W.2d 392 (2018) (procedural citation for effect of an evenly divided supreme court affirming the lower court)