*1 Kerry L. Putnam, Carol L. Smith-Carter and individually Louis Boutan, and on behalf of all similarly Plaintiffs-Appellants- others situated,
Petitioners, v.
Time Warner Cable of Southeastern Wisconsin, Defendant-Respondent.
Limited
Partnership,
Supreme Court
4,
No.
argument February
99-2078. Oral
2002.—Decided
July
For Jeremy Friebert, Friebert, P. Levinson Robert H. argu- Finerty John, S.C., Milwaukee, & St. and oral by Robert ment H. Friebert. of a PROSSER, T. J. This is a review 1. DAVID appeals,1
published of the court of which decision County an Milwaukee Circuit affirmed order Judge, dismissing prejudice Wells, Lee E. with an Court, brought by putative class of cable television action against of Southeastern customers Warner Cable (Time Warner). Partnership Wisconsin, Limited presented First, 2. Two for review. issues are voluntary payment preclude cable does the doctrine recovering portion from television customers monthly they late-payment claim fees that constitutes liquidated damages paid if the customers unlawful objection protest? expressing any fees without Sec- erroneously dis- did the circuit exercise its ond, court Wis., App Putnam v. Time Warner Cable SE 2001 WI 41, 2d 247 Wis. N.W.2d request cretion when it concluded that the customers' rights injunctive for a declaration relief to prevent imposing late-payment Time Warner from such justiciable in the future fees was not because the *6 allege present failed customers to a harm? voluntary payment holdWe that the doctrine recovering monetary
bars cable customers from dam- ages allegedly for their unlawful fees with- objection protest, out prop- if the customers do not erly allege part mistake of fact on their or fraud or part company. duress on the of the cable We also misapplied conclude, however, that the circuit court respect justiciability requirements law with to for de- claratory judgments. Therefore, the customers' claims declaratory permitted go relief should be forward.
I. BACKGROUND ¶ 4. The issues in Time this case stem from imposition late-payment Warner's of a fee $5.00 pay monthly cable customers who fail to their cable bill by specified the time in their contract. Three of these Kerry customers, Putnam, L. Carol L. Smith-Carter, individually and Louis Boutan, and on behalf of a (the putative similarly class of situated customers cus- plaintiffs), brought tomers or an action to recover monetary damages portion for which, the fee they reasonably claim, is not related to Time Warner's payments.2 actual costs incurred as a result of late The 2 The complaint amended following stated the theories of (1) (2) relief: liquidated unlawful damages; unconscionability; (3) implied breach of good covenants of faith dealing; and fair (4) (5) (6) unjust enrichment; restitution; money had and (7) received; (8) violation of Act; Wisconsin's Trade Practices (9) equitable accounting; declaratory injunctive and relief. injunctive sought relief
customers also imposing prevent such fees Time Warner from future. complaint amended con- 5. The customers' allegations against Time Warner.
tained numerous The upon alleged required, complaint are that customers television other activation cable "installation and/or programming," contract, adhesion unilat- to execute an erally by Warner, licensed mo- "Time constructed requires expressly nopoly."It that this contract asserted prepay service, month for the first of cable customers imposes a late fee on and Time Warner thereafter $5.00 subsequently pay fail to their cable bills customers who by monthly complaint further al- due date.3 leged not, fact, bear that Time late fee "does Warner's relationship reasonable costs incurred to the solely payments late as a result of the and/or *7 paying customers," is it a reasonable estimate late nor facing actual Time of that cost. It asserted that the cost single payment for a late is between and $0.38 Warner alleged complaint The that Time also Warner's $0.48. recovery a of late fees constitutes double collection already incorporated non- because Time Warner has payment rates, costs into its basic which collection cable by approved Federal have been the Communications complaint alleged Time Commission. The that Warner misrepre- "omitted, omit, conceal, to and and continues alleged payment system repre complaint that this by profit-making a scheme Time Warner. Ac sents deliberate designed cording complaint, consciously to the "Time Warner its billing cycle uniformly systematically due dates and and to percentage paying 'catch' a consistent of its customer base late. manner, guarantees In this Time Warner that late fees will provide a and substantial source of revenue." consistent sent the unreasonable basis for the late fee and its true payment," penalty nature as a for late and does so fraudulently. Finally, alleged complaint that the cus- "[i]n [Time Warner's]
tomers, reliance on concealments, suppressions, paid . and . . at one omissions least exces- sive fee and unconscionable late to Time and Warner" paying that Time customers Warner late fees do so "under and the duress real and threat imminent monopolist pro- Warner, Time for cable television gramming , . . . would disconnect the cable television paying
services late of a customer." ¶ 7. Time Warner to moved dismiss all the cus- multiple grounds, among tomers' claims them that precluded voluntary payment all were the claims response, doctrine. In the customers asserted that the inapplicable First, doctrine two was for reasons. possess knowledge not customers did of all facts charges relevant the late-fee to because deceptively Second, concealed those facts. the custom- meaningful opportunity ers lacked a the late contest hearing arguments, fees. After these the circuit court voluntary determined that the doctrine barred recovery past payments the customers' late-fee excess of Time Warner's costs. The court also actual injunctive concluded that the claim for ripe relief was not for amended resolution because the complaint allege any pres- had failed customer ently pay granted It refused late fee. therefore petition motion to dismiss denied customers' complaint. leave to further amend their *8 affirming ¶ In conclusions, 8. both the court of appeals multiple why, "regardless advanced reasons of the assertions, truthfulness of the the vol- customers' untary payment precluded doctrine for their claims
recovery payments Time in excess of of late-fee Putnam v. Time Warner Cable Warner's actual costs." of App ¶ 41, 633 Wis., 9, 247 Wis. 2d SE 2001 WI allege to that First, the customers failed N.W.2d 254. duty any specific Time had the to disclose affecting amount, factors the late fee Time Warner duty. complaint ¶ Second, had no Id. at 10. the amended allege not that fraudulent actions Time Warner did materially pay the affected the customers' decisions to propri- "If the never the late fees. ety customers considered they certainly paying them, of fees the late before any pay did not the fees as a result of fraudulent misrepresentation ¶ Third, Id. at 11. concealment." customers] fees] paid [the [the late most, "at . . . be- regarding Time cause of a mistake of law whether legally charge to late fee." Warner was entitled $5.00 ¶ Fourth, at failed Id. 12. the customers to establish they paid fraud the late fee as result of or mistake perpetrated by Finally, ¶ Time Id. at 13. Warner. they subject claim that customers' were disconnecting of Warner's threats cable service for not paying fee a late did not rise the level economic ¶ Id. at duress as a matter law. appeals despite
¶ that, 9. The court noted also legal some differences between the customers' claim damages liquidated other claims for unlawful and their monetary liquidated relief, the customers' unlawful damages properly was claim also dismissed based voluntary payments. Finally, ¶¶ their Id. at as to 15-21. declaratory judgment court action, deferred ripe action not circuit court's decision was judicial Id. review and relief. at appeal court, 10. On to this the customers They present arguments. maintain that the circuit two *9 voluntary applying payment court erred in doctrine liquidated in this case to based claims on unlawful damages. They also contend that the circuit court erred disallowing injunc- their claims for tive relief. dispute
¶ 11. Because this involves a motion to legal insufficiency dismiss plaint, on the based of the com required the circuit court was assume allegations complaint. truth of all in the Wausau factual County Corp., Tile, Inc. v. 235, 245, Concrete Wis. 2d (1999). analyzing In case, N.W.2d 445 this we allegations likewise take as true all made in the cus complaint tomers' amended and draw all reasonable Upon inferences in favor of the customers. a motion to dismiss, "Unless it seems certain no relief could be granted any plaintiff of under set facts that the could prove, complaint improper." dismissal of the Id. is
II. ANALYSIS Payment Voluntary A. Doctrine voluntary pay- first address We whether ment doctrine bars customers Warner from recovering damages liquidated damages an unlawful claim. voluntary payment places 13. The doctrine
upon party challenge validity who wishes to or legality obligation of a bill for to make the challenge voluntarily making payment, either before voluntarily making payment. at the time of 66 Am. See (2001) § Implied 2d Jur. Restitution and Contracts 108 ("The person rule well settled that a recover cannot full he with
money voluntarily paid or she has duress, fraud, all the facts and without knowledge form, lie to and that no action will or extortion some (First) Restatement voluntary recover the payment."); (1937). Restitution § 112 The basic description *10 in not doctrine, as the court of is employed appeals, dispute. "as voluntary payment provides
The doctrine that [person], paid voluntarily, [person] money and between facts, all and or knowledge with of the without fraud duress, merely on account of cannot be recovered ignorance Douglas or of the law." v. mistake Frederick (1897). 411, 423, County, 71 N.W 798 The 96 Wis. applied has in doctrine been several diverse contexts preclude payments parties paid recover that actions to facts, voluntarily, knowledge with full of the material wrongful inducing pay- and absent fraud or conduct ment.
Putnam, The 196, voluntary 2001 WI 8. App payment ¶ often considered the to the counterpart doctrine is doctrine, jurisdictions reject mistake of law and reject one of the doctrines almost the other. universally N.A., Palatine, Harris Bank See Randazzo v. 262 F.3d (7th 2001) 663, L. (citing Camp, 667-68 Cir. Stephen in Georgia, The Doctrine Note, 16 Voluntary-Payment (1982)). Ga. L. Rev. 893 Wisconsin has adopted mistake of law doctrine.4
4
every person
mistake
law doctrine
of
states
ignorance
know
law
cannot
of the
presumed to
claim
Hall,
125,
(1860);
v.
12
law as a defense. See Hurd
Wis.
137-38
1999)
(7th
(defining
also
ed.
Dictionary
see
Black's Law
1017
of
fact
legal
mistake of law as a "mistake about
effect known
("a
situation");
§
Restatement Restitution
7
'mistake of law'
of
legal consequences
of an
set
means a mistake as to
assumed
facts").
ago
"A
law
Long
this court declared that mistake of
458
Wisconsin,
In
the voluntary
doc
payment
developed
trine
as a common law
and has been
principle
1800s,
various contexts. Since the late
it
applied
has
repayment
been
to bar
of a
applied
judgment
errone
Allen,
attorney, Gage
v.
to an
ously paid
98,
89
61
Wis.
(1894);
N.W. 361
to bar
repayment
overpaid
interest
Bank,
Burgess v. Commercial National
loan,
on a
144
59,
(1910);
Wis.
N.W. 436
to bar
repayment
taxes
tax-exempt, G. Heile
that was
paid
property
Crosse,
man Brewing
City
Co. v.
La
2dWis.
(Ct.
1981).
2d 875
N.W.
App.
The "voluntary"
voluntary
payment
doctrine
not
does
entail
mere
of the bill or
fee. For
some
example,
might
customers
not
their
pay
cable television bills if their
did not
provider
cable
facts,
happens
party, having
knowledge
when a
full
comes
legal
to an erroneous conclusion as to their
*11
It is a
effect.
inference,
opinion
mistaken
or
from
arising
imperfect
an
or
they
judgment, upon
really
incorrect exercise of the
facts as
Hurd,
are .
12
recognized
..."
Wis. at 138.
has
that a
Wisconsin
relief,
generally precludes
mistake of law
but the
is
doctrine
not
Rosier,
19, 31,
without limitation.
1
See Heinemann v.
240 Wis.
(1942) ("The general
N.W.2d 803
equity
rule is that courts of
will
law.");
grant
not
relief from a mistake of
Plumbers Woodwork
Bureau,
466,
Adjustment
Co. v. Merchants Credit &
199 Wis.
("It
(1929)
472,
general principle
equity
have
payment
receive
for
the doctrine allows entities that
rely upon
and
them
these funds
to use
services to
Heileman, 105 Wis.
unfettered in future activities. See
operates
the doctrine
as a means
Second,
2d at 161-62.
litigation by
disputes
requiring
settle
without
contesting
notify
party
payee
of
its
payee
notification, a
who has
concerns. After such
acted
wrongfully
rectify
Flam
react
the situation.
can
Cf.
Corp. Honeywell
Sys.,
v.
116 Wis. 2d
beau Prods.
Info.
(1984) (noting
com
95, 101,
that the
attack the soundness they dispute applies Rather, it to the trine. whether they words, In chal- circumstances this case. other lenge person pays late-payment fee whether who protest alleges the fee without who was thereafter damages, liquidated from based unlawful barred recovery making a claim for the initial because voluntary properly payment. believe such claims are We barred. substantially agree
¶ 18. with the court of We *12 analysis regarding appeals' applicability of the vol- untary payment for doctrine to the customers' claims allegations repayment. of The thrust the customers' allege they paid First, the customers two-fold. that knowing fee that Time late without Warner's $5.00 payment only from late were actual costs to $0.38 they Second, that maintain Time Warner con- $0.48. regarding late-payment material information cealed its assuming allegations costs.5 Even true, these are nei- allegation exceptions ther falls within the to volun- tary payment appear doctrine. The customers to be synthesizing allegations, sounding the two one in fraud hope fact, the other mistake with of that the argument greater whole of the summated will than be parts. its individual they
¶ 19. The customers' contention that lacked goes part, mistake full to a information of on their law complain not a mistake material fact. The customers they realizing mistaken were in not actual only payment cost of late to Time Warner was $0.38 possessed However, the customers full $0.48. knowl edge of the late fee and of the $5.00 circumstances they exposed under which would be to it. See Dillon v. U-A Westchester, Columbia Cablevision 740 N.Y.S.2d (N.Y. 2002) App. (using knowledge 396, 398 Div. of these recovery denying facts as a basis of unlawful late- payment voluntary customers, cable fees under the doctrine). Although they any failed exercise diligence inquire cost-accounting into or contest the late-payment basis Time Warner's fee, the customers impermissibly now assert that Time concealed and omitted information related to the of the fee basis argued theory Although customers in the duress they argument court appeals, abandoned that before this court. *13 conflates the of mistake of This assertion issue
amount. allegations the customers' of fraud.6 fact with customers'allegations of fraud are to no complaint does more than The amended no assert avail. part wrongdoing Warner; the Time nebulous it allege particularity required with the does not fraud pleading requirements. Wis. Wisconsin's under (1999-2000).7 appeals § As the court of 802.03 Stat. correctly argue noted, failed to that Time the customers cost-accounting duty infor- had a to reveal this necessary by to fraud mation, an element establish Co., 2d See Ollerman v. O'Rourke 94 Wis. omission. (Second) (1980) (citing N.W.2d Restatement 26, 288 95 (1977)). § Torts, 551, In all, cmt. b the customers' of failure precise underlying to know the factors charge decision late fee cannot to be $5.00 Warner's fact to as to the basis the held be mistake product by payment made, is it the of fraud nor tacitly suggest To conclude otherwise would omission. payment in all demands for business transactions accompanied by need to be an itemized list would charge, payor explaining the for each that the basis so knowledge required of the facts as the had full voluntary payment doctrine.
¶ the customers have failed to show Because inquire fact, or mistake we into whether there fraud something allegations the distinctive about facts applying in their case that would warrant not voluntary payment precludes general rule that subse- 6 ignorance goes Mistake fact "unconscious forgetfulness of... a fact.. . material the contract." Kowalke Co., 472, 476, Light Elec. & 103 79 Ry. v. Milwaukee Wis. N.W. omitted). (1899) (quotation are subsequent All references to Wisconsin Statutes 1999-2000 version unless otherwise indicated. quent legal redress. The customers claim unlawful liquidated damages argue that because Time liquidated damages8 Warner demanded unlawful voluntary payment inapplicable. They doctrine is assert liquidated damages that both the unlawful doctrine and voluntary payment equitable doctrine are in nature appeals but that the circuit court and court of failed to *14 wrongful take into account Time Warner's conduct invoking voluntary payment before doctrine. ¶ argue 22. In essence, the customers for the exception voluntary creation of an additional to the payment reading exception doctrine. A broad of this private entity engages wrong- would be that when in entity may conduct, ful not avail itself of the voluntary payment doctrine to block claims derived wrongful reading from the conduct. A narrow of the exception "wrongful would limit conduct" to the of use liquidated damages unlawful clauses.
¶ exception 23. We decline to create a new to the voluntary payment doctrine based on either of the preceding prin- Instead, theories. we conclude that the ciples public policy equity gave of and birth to the support application doctrine its in this case.
¶ compare liquidated First, we an unlawful clairp damages wrongdoing to the few claims of that are currently exceptions voluntary payment to the doc- competing equitable trine. Second, we address how the 8 The allege customers in their complaint amended that the provision late fee represents of cable service contract "an illegal liquidated damages provision under common law and is public policy." void as a matter of public policy
principles and considerations vol- untary application reason for its doctrine this context. damages liquidated
¶
A25.
claim of unlawful
sufficiently
duress,
claims of
or
not
similar to
fraud
join
exceptions to
fact,
of material
them as
mistake
voluntary payment doctrine.
allegations
between
fraud
differences
allegations
of fact versus
of unlawful
and mistake
damages
liquated
manner in
are discernible
802.03(2)
§
pled.
must
which each
requires
be
Wisconsin Stat
allegations
mistake
of fraud
of fact
be
allegations
particularity.
pled
instance,
with
For
specify
particular
involved,
fraud must
individuals
misrepresentations occurred,
and when
and to
where
misrepresentations were made. See Friends
whom
App
Green,
217, 16, 239
2d
Kenwood v.
2000 WI
Wis.
protects
pleading
78,
¶ 27. Fraud
of a
volitional act
consists
part
defrauding party.
See Black's Law
(7th
1999)
Dictionary
(defining
ed.
"fraud" as "1. A
knowing misrepresentation of the truth or concealment
factBy
contrast,
of a material
not all invalid or
wrongful
charging
conduct related to
fees under a
knowing
contract involves intentional or
violation of
party
may
instance,
law. For
a
an
adhesion contract
liquidated damages
insert an unlawful
clause into the
any
knowledge
illegal-
contract without
intent or
of its
ity.
explained
fact,
In
Panos,
as
v.
Wassenaar
111 Wis.
(1983),
2d
524-25,
unlawful Duress involves tently wrongful designed act that is and undertaken to overcome Fleischman, the will of another. See v.Wurtz (1980) (discuss 2d 100, 109-10, Wis. 293 N.W.2d155 duress). ing meaning of economic It overcomes the payor through will of fear, coercion or which is imposition liquidated different from the damages. of unlawful ¶ 29. These differences under the law in the treat- allegations fraud, ment of duress, and of fact mistake liquidated damages against versus unlawful advise being equals. Allegations them treated as fraud, negate duress, and mistake each work to the true payments. wrongdoing voluntariness of of unlaw- liquidated damages may ful be technical in nature.
¶ that another rationale behind 30. We believe applicable agree is to this case. with the the doctrine general We payment principle person that a who receives any protest payor from the from another without rely on use of funds without be allowed to the should pay- risking subsequent for demand return applies equal principle when ment. This payor with force the payee a cable customer and the is television is provider. that customer's cable appeals Heileman, In the court articu- of justification. applied policy lated and this Heileman against City brought Crosse, La suit La Crosse seeking County, and the return State of Wisconsin money paid prior years property in for taxes on that the company tax-exempt. later 2d learned was 105 Wis. at though The 154-55. court concluded that even previous initio, tax were void the vol- assessments ab untary payment precluded doctrine return of tax payments. Id. at The the reason 161-62. court stated voluntary applying payment doctrine bar the plaintiffs claim: requirement involuntary of resistance to or public policy: government of a tax has is one in allocating
an interest its resources. It is desirable government spending that it contemplates know when funds are public funds that those either available subject through inequity to loss refund.. tax . . The illegally outweighed by paying collected taxes requirement government know amount of what income it has available.
Id. argues that the rationale ex- equally present
pressed applies case. Heileman apply It contends a failure to the doctrine cases *17 private entity in which a is threatened with suit for repayment ability would be detrimental to the of busi- persons reasonably rely upon nesses and other and money respond use received. The customers that the equitable policy voluntary pay- and reasons behind the apply ment doctrine do not to the circumstances of the present Specifically,they argue case. that the rationale apply equally behind the Heileman decision should not non-governmental entities. underpinning 33. We believe that the rationale applicable the Heileman decision is to the fiscal inter- private ests entities. Private businesses such as Time incorporate Warner should be able to into their revenue payments by stream dispute. made their customers without payor sidestep
All that a has to do to voluntary payment doctrine is to make some form of protest prior contemporaneous over the to, fee with, payment. payee given aWhen has been that notice, the funds received can be sécured for future use until the dispute is settled. acknowledge 34. We that there are differences by governmental body
between funds received a through private taxation and revenue received entity pur- from business transactions.9 However, for
9 In separate opinion case, his in this Judge Schudson asked: encompass [D]oes private enterprise? the rationale of Heileman Is enough say, declares,
it majority as the that "some of a government's analogous private entity's fiscal concerns .. . are to a fiscal concerns as well"? pivot point majority's That's the tenuous in the decision on unlawful-liquidated-damages all, customers' claim. After it is (or thereof) undisputed portion unlawful, if the late fee charged then, Time Why, Warner never should have it. should voluntary payment doctrine, the poses applying the private public principles Both the are similar.10 rely on these resources. able to should be sectors stability provides voluntary cer- doctrine notice tainty without transferred once funds have been thereby decreasing costs dispute, the transaction ago long payments could received if accrue that would appeals noted, the court of back. As be demanded payments, receiving "[r]egularly those late-fee *18 profits projecting operations, its its continued Warner App accordingly."Putnam, 196, 20. 2001 WI and costs voluntary Abandoning payment here doctrine the challenges array open for a wide the door would past persons protecting payments who in the name of contesting inquiring tardy demands into and in were equities payment. fail to customers who of cable for against allegedly timely protests unlawful late- make payment weighed against the inter- fiscal must be fees certainty payments providers in the ests of cable balancing dispute. favors find this We received without voluntary preservation of the and the the latter interest payment in context. doctrine this advantage of its own take financial
Time Warner be allowed to
clear,
applies,
is
wrongdoing?
rationale
the answer
If the Heileman
If, however, the Heileman
in the clear.
Time Warner is
against
why government
such a
(explaining
is insulated
rationale
claim)
that,
enterprise
private
in our free-
apply
not
to a
does
economy,
expected
the conse-
perhaps
to suffer
should be
market
survives,
wrongdoing,
claim
quences
then the customers'
itsof
voluntary payment
notwithstanding
doctrine.
the
(Sehudson, J., concurring
Putnam,
36-37
App
2001 WI
¶¶
omitted).
(citations
dissenting
part)
in
part,
voluntary payment doctrine
addition,
note that the
In
we
Allen,
98, 61
Gage
89 Wis.
actions. See
v.
private
not new to
Bank, 144 Wis.
(1894);
Nat'l
Burgess
v. Commercial
N.W.
(1910).
59,
11
nearly
holding
This
is consistent with
number of
jurisdictions
recovery
identical
from other
in which
of late
cases
providers
by
voluntary
payments
fee
to cable
was barred
See, e.g.,
Operations,
Horne v. Time Warner
payment doctrine.
MediaOne,
(S.D.
Hassen v.
1999);
F.Supp.
119
2d 624
Miss.
751
(Fla.
Co. v.
2000);
Telescripps
Cable
App.
So. 2d 1289
Dist. Ct.
Welsh,
(Ga.
Time
Entm't
2000);
App.
640
Ct.
542 S.E.2d
(Ind.
Whiteman,
Dillon
2001);
Co. v.
1265
Ct.
App.
741 N.E.2d
Westchester,
v. U-A Columbia Cablevision
740 N.Y.S.2d
of
Inc.,
(N.Y
2002); McWethy v. Telecomms.
unlawful claim were liquidated damages missed the circuit court.12 B. Relief Declaratory now address whether the circuit court 37. We the customers' claim for
properly declaratory denied relief Time Warner from late- prevent imposing fees in the payment future. In amended complaint, the customers Injunctive
asserted a claim for and "Declaratory Equi- of table Relief' a series for court involving requests orders, of Time late- regarding Warner's propriety argue fees.13 The customers payment declaratory 12Each of the claims for relief stated in the amended theory liability complaint premised on a that Time Warner imposed liquidated damages through an clause unlawful late-payment insertion of the fee in its service contracts $5.00 manner, alleges, with cable subscribers. Each count in some payments that Time from Warner received the late fees "which reasonably are not related to its actual costs." We conclude that precluded voluntary because the customers are under. the seeking repayment allegedly doctrine from unlawful claims, liquidated damages, the additional exception with the relief, encapsulated claims for are in the overall theory subject properly voluntary payment are to the doctrine. complaint for: asked
(a) rights [A] court determination of the of Plaintiffs and corresponding rights Class and Warner concern- ing fees; the imposition of late
(b) unlawfully court declaration that Time [A] Warner has imposed late excessive fees Plaintiffs the Class Mem- bers;
(c) An enjoining continuing order Time Warner from impose costs; late fees that are not related to its reasonable *20 necessary they relief is because and others will invari- ably subject Time late be to Warner's fees the future. They argue long permitted that as as Time is to Warner charge these unlawful face a fees, customers Hobson's paying having choice of the excessive late fees or their They cable service terminated. therefore maintain that justiciable dispute is and a declaration that the late illegal appropriate.' fee is controversy
¶ 39. Time Warner counters that ripe judicial argues is not imposition determination. It contingent upon
of a late fee is these cus- making payments tomers late and on Time Warner demanding payments of the late fee from these custom- Time ers. Warner characterizes the customers' claims as uncertain because neither of these occurrences will necessarily transpire. argues, Therefore, it the circuit properly denying court exercised its discretion de- claratory relief. argument support-
¶ 40. The court circuit heard ing opposing dismiss, and Time Warner's to motion but deny declaratory it decided to relief without an eviden- (d) requiring An order Time appropriate Warner to conduct necessary reasonably and to studies determine the actual or anticipated damages might solely that Time Warner incur as a payments customers; of late paying result late and/or (e) requiring An order Time Warner disclose its all customers information facts discovered under the stud- above; ies mentioned
(f) An requiring order Time Warner to send a notice to all of concerning its customers the terms and conditions under which any future; penalty late fee or will be assessed in the
(g) requiring A court order to refund to paid Plaintiffs and the Class Members all late fees excessive Time Warner. *21 articulated the standard recently We
tiary hearing. a circuit court's decision courts review appellate which relief: deny declaratory or permit whether deny declaratory relief falls grant A decision to The circuit the discretion of the circuit court. within deny] declaratory grant [or relief will court's decision erroneously not be unless the circuit court overturned uphold a exercised its discretion. This court will discre- tionary act if the circuit court "examined the relevant facts, law, and, proper using a standard of a applied reached a process, demonstrated rational conclusion reach." judge that a reasonable could Milwaukee 2001 County, Milwaukee Dist. Council 48 v. (citations 36, 244 866 65, 333, WI Wis. 2d 627 N.W.2d omitted). leading declaratory 41. The Wisconsin case Bunderson, 107 Wis. 2d 320
judgments Loy is v. (1982). that a Loy emphasized declaratory N.W.2d 175 justiciable. is a is Id. fitting controversy when judgment A when the controversy justiciable following at 410. is are factors present:
(1) controversy right A claim which a is asserted against contesting one has an interest in it. who (2) controversy persons The must be between whose interests are adverse.
(3) declaratory a party seeking relief must have legal controversy say, interest in the is to a —that legally protectible interest. (4) controversy ripe must The issue involved in the be judicial determination. satisfied, "If all are controversy Id. four factors for a court entertain an 'justiciable,' and it is proper declaratory judgment." action for Miller Brands- Case, 684, 694, Milwaukee v. 2dWis. 470 N.W.2d (1991). Looking ¶ 42. record, at the the circuit court's very discussion of the claim relief was brief. question controversy The court did not that bona fide parties legally pro- existed between adverse over a validity tectible interest in the of contractual terms. In allege effect, it relied on the customers' failure to they suffering present were harm. The court observed currently that none of the customers was faced with *22 ("no paying a late fee one asserted that I a $5.00 have paid late fee[,] bill that I have not it I and don't intend it"). pay Therefore, concluded, court this issue "ripe enough," failing was not the fourth factor of the justiciability appeals agreed standard. The of court with adding conclusion, this that "the customers' amended complaint rights asks this court to construe their 'in anticipation may happen' of an event that never —their pay failure to imposition the cable bills on time and Time Warner's Putnam,
of the five-dollar late fee." 2001 WI (citations omitted). App. ¶at premised 43. To the extent that the circuit court solely present its decision on the lack of harm to the apply proper three customers, named did it not a purpose standard of law. The of the Uniform Declara- (Wis. 806.04),14 tory Judgments § Act Stat. is to allow provides, § Wisconsin Stat. in pertinent part: 806.04 (1) jurisdic- Scope. respective Courts of record within their status, power rights, legal tions shall have to declare and other relations whether or not further relief is or could be claimed. No proceeding objection open ground action or shall be on the declaratory judgment prayed or decree is for. The declaration may effect; negative be either or affirmative form and and such certain identifiable, resolve anticipate courts See Wis. adverse parties. between disputes Regents Lister v. Bd. 806.04(12); § see also Stat. of judgment a final or have the force and effect of declarations shall filing appeal decree, except finality purposes as an 808.03(1). right s. shall be determined in accordance with (2) construe, Any person interested under a Power to etc. deed, will, writings constituting a contract or other con- written tract, rights, legal or other relations are affected or whose status ordinance, franchise, may statute, by municipal or have contract validity arising any question under of construction or determined statute, ordinance, instrument, contract or franchise and rights, legal relations a declaration of status or other obtain party right be denied the to have declared the thereunder. No shall municipal validity any virtue of the fact statute or ordinance permit party or under such statutes or that the holds a license ordinances. (3) may construed either before Before breach. A contract be
or after there has been a breach thereof. (6) Discretionary. may or enter a The court refuse to render decree, declaratory judgment judgment if or decree where such or entered, uncertainty would not terminate the rendered or controversy giving proceeding. rise to the (8) Supplemental relief. Further relief based on a *23 may granted necessary proper. judgment or decree be whenever or having application petition The therefor shall be to a court jurisdiction grant application If the deemed to the relief. be sufficient, shall, notice, require any the court on reasonable adjudicated by party rights been the declara- adverse whose have decree, tory judgment why further relief should or to show cause granted not be forthwith. (12) remedial; declared to its Construction. This section is be uncertainty purpose is to settle and to afford relief from legal relations; insecurity respect rights, to status and other with liberally and is to be construed administered.
474
Sys.,
282,
72
2d
307,
Univ. Wis.
(1976).
Wis.
f
declaratory judgment
ripeness
is different from the
required
48,
in other actions. Milwaukee Dist. Council
Lynch
¶65,
Conta,
2001 WI
41. In State ex rel.
v.
71 Wis.
(1976),
analyzed
662,
2d
judgments permissible harm when the is are anticipatory, maintains that the circuit court's but it injunctive declaratory and the claims for dismissal of ripeness in accord with relief was nonetheless requirements argues justiciability. It that the circuit might recognized late-payment properly fees court imposed customers, on because be these never they will be late themselves control whether customers monthly paying Time Warner as- their cable bills. certainty precludes conclusive that this absence serts adjudication justiciable. controversy is not We and the disagree. adopted proposition Loy, In this court certainty practical act and
that: "The imminence power capacity, intent, issue, or the or event clearly completed justiciability perform, as the create as generally easily distinguishable event, and is act contingent, events that remote, and uncertain from may Loy, (quoting happen." 2d at 414 never 107 Wis. (2d ed.)). Judgments Declaratory Time Borchard, payment imposition fee for late is an of $5.00 Warner's certainty. allege plaintiffs practical imminent average, percent Time that, 10 to 15 Warner's pay fee each month. Time Warner the late customers trend not continue. offered no evidence that this will allegations must be taken as true. The customers' issue is whether Thus, the central legal right impose late- a $5.00 Warner has If it under their contracts. fee on its customers controversy not, additional over. It if does does, hypo- proceedings required. not This issue is will be precise, and abstract, real, or remote. It is thetical, the means to obtain immediate. The circuit court has *25 necessary additional whatever facts are to determine conclusively whether Time Warner's use of the $5.00 matter, late fees is lawful. The addressed, when will be purely legal validity commonly based on the of the fee imposed on a set of Time Warner's cable television customers.
¶ If the issue is viewed as the construction or validity provision, expressly of a contract it falls within scope declaratory judgment the of the statute:
Any person interested under a... written contract... rights, or legal whose status other relations are by may affected a... contract... have any determined question validity arising construction or under the ... . and rights, contract.. obtain a declaration of legal status or other relations thereunder. 806.04(2) added). § (emphasis
Wis. Stat. appeals ¶ 49. The court of dismissed the force of language, stating this that "it is clear from the amended complaint seeking that the customers are much more validity than a construction of the of the or a contract rights Putnam, declaration of their thereunder." App pointed part WI 26. It to that of the equitable relief claim that seeks dam- ages, remaining then remarked that "the claims seek requiring perform court orders various types (e.g. conducting disclosing studies, of tasks cer- etc.). providing information, tain notice to customers, requests beyond scope These are well of the Uni- Declaratory Judgments form Act...." Id. inconspicuous analy-
¶ 50. The "etc"in the court's principal sis includes claims for relief § rights under 806.04—a declaration of under the con- injunctive are These relief for the future.15 tract and types precisely Declara- claims that the Uniform tory Judgments A circuit to address. Act is intended uncertainty resolve about would court's declaration late-payment in Time fees Warner's of the lawfulness cable-programming contracts.16 argues Finally, that the cus- Time Warner remedy they adequate if at law have an tomers would pro- paying challenged late-payment it under fee recovery payment. suing Under then test and time- would be circumstances, this alternative any costly, impractical. consuming, event, In *26 remedy adequate not neces- at law does an existence of sarily declaratory propriety relief. obviate the sought may one factor to be be is but fact that relief 15 note 12. supra See
16
sought by
of some of the relief
It
true that the nature
is
declaratory judgment action extends
in their
the customers
Declaratory Judgment Act. For
the Uniform
beyond
scope
the
declaratory
equitable
relief is an
the claims for
example, one of
According to
already paid.
late
refund of excessive
fees
claim for
for
to an action
appeals, "These claims amount
the court of
subject of an action for
proper
not the
damages and are
196,
Putnam,
(citing
26
App
2001
declaratory judgment."
WI
363,
Goll,
2d
Elevator Co. v.
18 Wis.
Rosenberg
F.
(1963) ("It
declaratory judgment to
not the role of
is
N.W.2d
damages.")).
for
place
take the
of an action
declaratory judgment
Nevertheless,
justicability
the
of a
sought.
for relief
inspection of all the claims
hinges
claim
on an
justiciable
properly
the claims for relief are
If one or more of
proceed. See
declaratory judgment, the action should
through a
806.04(1) ("Courts
respective
record within their
§
Wis. Stat.
status,
rights,
power
have
to declare
jurisdictions shall
is or could be
whether or not
legal
other
relations
relief
further
claimed.")
added.)
(Emphasis
weighed
deciding
declaratory judgment
in
whether
is
appropriate.
("declaratory
Lister,
III. CONCLUSION voluntary payment ¶ 53. We conclude that precludes doctrine the customers in action from this recovering allegedly portion unlawful of the monthly late-payment they paid pro- fee without However, test to Warner. we also conclude that erroneously the circuit court exercised its discretion barring claim customers' relief from imposition Time Warner's future late- $5.00 *27 sufficiently fee. The issue to be decided is clear conclusively and imminent for a court to determine legal rights provision under this of the contract. There- legality fore, a declaration as to the of the future imposition late-payment appro- of Time fee Warner's priate.
By appeals the Court.—The decision of the court of part, part, in in is affirmed reversed and the cause is remanded to the circuit court. (concurring in
¶ BABLITCH, J. A. 54. WILLIAM majority dissenting part). to allow part, refuses The damages pro- liquidated on an unlawful a claim based voluntary pay- exception an to serve as vision majority words, holds In other ment doctrine. voluntary fact, the fraud, duress, or mistake of absent notwithstanding recovery prohibits payment doctrine provi- damages liquidated of an unlawful the existence accordingly respectfully disagree dissent to I sion. join part majority opinion. II B parts I IIA I and of the majority opinion. monopolist ¶ for cable tele- is a 55. Time Warner programming area. If custom- in the Milwaukee vision go buy product, are free to the customers ers do not its Unfortunately customers, there is no for the elsewhere. general propo- go As a for cable services. "elsewhere" government monopoly created sition, customers special protection. deserve purposes
¶ action, assume of this we must 56. For charges $5.00, which in a late fee of Time Warner fee is written fact them to $0.48. $5.00 costs $0.38 damages. liquidated "Late fees" are into the contract as subject rigid imposed upon controls not to the are which the cable commission—controls Warner monopoly. price pays If for its custom- Time Warner eventually they presum- pay fee, are do not the late ers ably cut off. repeating, above, it is worth As stated but proceedings, purposes at time in the of this case this petitioner's of all the assume the truthfulness
we must allegations. to Time Thus, must assume that the cost we charged. $0.48, not the it We was $5.00 $0.38 fee not bear a reasonable this does
must assume $5.00 *28 relationship to the actual cost. We must assume that already incorporated the late fee is into the basic cable rates.
¶ charging sum, In we must assume the of a late fee is $5.00 accordingly unreasonable and unconscionable, and liquidated damages provision.
an unlawful majority ¶ says nothing 60. Yet the there is the paid by customer can do because the fee was the protest. customer without Why
¶ protest payment should customer of a if payment fee it has no reason at the time of believe that it is unreasonable unconscionable? and/or majority says If law, that is the and the is, it then all payees pursuant prior agreements of all late fees regarding payments, late fee banks, whether to credit cards, cally protest services, bills for like, and the must automati- right
at the time of or lose the contest it. That is, course, absurd. Yet it is the requirement by majority. set out Brewing City 62. G. Heileman Co. v. La (Ct. 1981), Crosse, App. Wis. 2d 312 N.W.2d875 upon majority, simply inapplicable. relied In government Heileman, the was the defendant. Here, entity private sued is in the Heileman, sector. In government any wrongful was not accused of conduct. wrongful Here, Time Warner is accused of In conduct. unduly delayed. Heileman, the claim was Here, the claim is within the statutes of limitation. Panos, 63. Wassenaar v. 518, 525, Wis. 2d (1983), though
¶ Furthermore, the 64. the analysis put in which three forth Wassenaar articulates determining questions in a court should consider circuit "(1) validity damage provision: liquidated Did the of a provide damages parties or for to for a the penalty? intend (2) injury by the one that Is the caused breach incapable at the difficult of accurate estimation is (3) damages stipulated Are the a time of contract? and of the harm caused the breach?" reasonable forecast (Footnotes omitted). Id. at 529-30. questions, quite my
¶ view, in are 65. three These inquiries voluntary pay- made in a distinct from the damages. involving liquidated not ment doctrine case again assuming ¶ the Here, 66. truthfulness of flunks at least two the assertions, the Warner way for the customer First, three. there was no to accurately injury the to Time when estimate damage paying stipulated Second, late. $5.00 caused, harm a forecast of the to $0.38 not reasonable $0.48. very sig- implications
¶ 67. The of this case are private to consumer and the sector. The nificant majority paid by that a late fee a consumer holds private agreement regarding pursuant late fee protest in cannot the absence of without challenged fraud, duress, or mistake of fact be at later liquidated damages I are date. would hold unlawful voluntary payment exception doctrine. I an respectfully part. in dissent I am authorized state that Chief Justice joins opinion. SHIRLEY S. ABRAHAMSON in this (dissenting part). SYKES, J. in DIANE S. I agree completely majority opinion with the on the issue voluntary payment application of the doctrine's to this join majority case, and therefore in I A, Parts and II appeals' which court affirms court of decision affirming plaintiffs' the circuit court's dismissal monetary claims for relief in counts I-VTII of the complaint. disagree, I however, amended with the majority's II B conclusion Part the circuit court erroneously dismissing its exercised discretion in count plaintiffs' IX, the claim relief. *30 appeals properly
¶ I 70. that the conclude court of affirmed the circuit court's that the conclusion case was suitably postured declaratory judgment, not for in that ripe judicial the claim was not for I determination. appeals' would therefore affirm the of in court decision entirety. its grant deny
¶ declaratory 71. The decision to relief entrusted to sound discretion of the circuit ¶ Co., 11, 19, court. Jones v. Secura Ins. WI 2002 249 623, 575; 2dWis. 638 N.W.2d Milwaukee Dist. Council County, 65,
48 v. Milwaukee 2001 244 2d 333, WI Wis. Loy Bunderson, 627 N.W.2d v. 351, 866; 400, 107Wis. 2d (1982). 407, "While, 320 N.W.2d in all 175 as discretion ary persons may acts of a court, reasonable sometimes in outcome, differ all that this court need find to discretionary a sustain act is that the court trial exam applied proper facts, ined relevant a standard law, of using process, and, rational demonstrated reached a judge Loy, conclusion that a reasonable could reach." Applying Wis. 2d 107 at 414—15. this deferential stan-
483
here, I conclude that the circuit court's
dard
discretionary
review
declara-
to dismiss the claim for
decision
tory
upheld.
must
relief
be
authority
rights
Though
un
to declare
Judgment
Declaratory
broad,
Act is
it
der the Uniform
scope. Sipl
Sentry
Co.,
in
v.
Ind.
146
is not unlimited
(Ct.
1988).
App.
459,
685
The
464,
2d
431 N.W.2d
Wis.
justiciability
determining
the threshold
standards
majority
declaratory
in
relief, set forth
a claim for
opinion
¶ 40, assure that courts will not become
at
upon
entangled
disagreements
in
or be called
abstract
essentially
contingent
advi
or render
to resolve
claims
sory rulings.
Case,
v.
162 Wis.
Miller Brands-Milwaukee
(1991).
694-95,
2d
290
The fourth
684,
N.W.2d
Loy
equation
justiciability
requirement of the
—the
declaratory
requirement
ripeness guarantees
—
judgment
procedural
tool for the
is not used as
adjudication
hypothetical
Klaus
Vander
issues.
v.
(1982).
Heyden,
365,
2d 353,
106 Wis.
¶ on 74. construes this conclusion part law, as an of inter- of the circuit court error injury. disagree. preting requirement present I it as of simply concluding The circuit court was that complaint amended was it insufficient because lacked allegations anticipatory injury, an even and therefore declaratory judgment claim, the pleaded, it at least as was then premised contingent may
was on a event happen. never The circuit court noted that had the plaintiffs simply alleged they unpaid had a late they bill on had which been assessed or were about to be alleged illegal plaintiff fee, assessed an late then "the declaratory judgment would be to a entitled and deci- perhaps injunctive they sion relief. But haven't done that." agree majority's I cannot with conclu- erroneously
sion that the circuit court exercised its dismissing judgment discretion in might disagree claim. While this court with circuit ripeness court's issue, resolution the record nevertheless reflects that the circuit court examined applied proper facts, law, relevant standard judge reached a conclusion that a reasonable could appeals I reach. affirm the would court on all issues. Accordingly, respectfully I from II B dissent Part majority opinion. I am authorized state that Justices JONE join N.
WILCOX and PATRICK CROOKS dissent- this ing opinion.