881 N.W.2d 702
Wis.2016Background
- Lands' End made a written settlement offer under Wis. Stat. § 807.01(4) on July 1, 2009; the City rejected it. After protracted litigation, the court of appeals ordered entry of judgment for Lands' End for $724,292.68 plus statutory interest. The parties disputed which statutory interest rate applied.
- Prior statute (in effect when the offer was made) awarded 12% interest from date of offer when the offeror later recovers judgment. 2011 Wis. Act 69 amended § 807.01(4) to replace 12% with "1% plus the prime rate" measured by reference to the year the judgment is entered.
- Lands' End argued it was entitled to 12% because its offer predated the amendment; the City argued the amended rate applies because judgment was entered after the amendment took effect.
- The circuit court awarded interest at the amended rate (1% + prime). The Wisconsin Supreme Court granted bypass review and affirmed the circuit court.
- The Supreme Court also overruled the contrary published court of appeals decision in Johnson v. Cintas Corp.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the amended § 807.01(4) applies to an offer made before amendment but judgment entered after | Lands' End: applying the amended rate is retroactive and improper; the applicable rate is the one in effect when the offer was made (12%) | City: the rate is determined by the statute in effect when the judgment is recovered/entered; the amended rate governs | Court: The amended statute applies; no retroactive application because Lands' End had no vested right prior to judgment recovery |
| Whether Lands' End had a vested right in the 12% rate when it made the offer | Lands' End: its entitlement to 12% vested at time of offer | City: entitlement to interest did not vest until recovery of a qualifying judgment | Court: entitlement contingent on later judgment; no vested right until judgment recovered, so no impairment |
| Due process and Wis. Stat. § 990.04 challenge to applying amended rate | Lands' End: retroactive application (or impairment of vested right) violates due process and § 990.04 | City: no vested right was impaired; § 990.04 does not preserve inchoate/contingent rights | Court: due process and § 990.04 challenges fail — no retroactivity or vested-right impairment |
| Equal protection challenge to disparate treatment of pre-amendment offerors who recovered before vs after amendment | Lands' End: classification is arbitrary because timing (including judicial delay) causes unequal treatment | City: legislature has rational basis to distinguish those who had already obtained judgments (vested) from those who had not | Court: rational-basis satisfied; legislature reasonably tied different treatment to whether right had vested (judgment obtained) |
Key Cases Cited
- Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (framework and presumption against retroactivity; analyze whether new law "attaches new legal consequences" to completed events)
- Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984) (retroactive civil legislation reviewed under rational-legislative-purpose standard)
- Society Ins. v. LIRC, 326 Wis. 2d 444 (2010) (Wisconsin confirmation that challenger must prove unconstitutionality beyond reasonable doubt; retroactive legislation judged by rational basis)
- DeWitt Ross & Stevens v. Galaxy Gaming & Racing Ltd. P'ship, 273 Wis. 2d 577 (2004) (interest under § 807.01(4) requires an actual judgment)
- Winiarski v. Miicke, 186 Wis. 2d 409 (Ct. App. 1994) (contingent rights do not vest until the future event occurs; statutes in force at the time of the decisive event govern)
- Johnson v. Cintas Corp., 360 Wis. 2d 350 (Ct. App. 2015) (court of appeals decision holding contrary to this Court; overruled by Wisconsin Supreme Court)