Wisconsin Labor and Industry Review Commission --
Summary of Wisconsin
Court Decision relating to Unemployment Insurance
Subject: Lakeshore Mental Health Inc. v. LIRC and DWD, Case 07 CV 1240 (Wis. Cir. Ct., Sheboygan Co., March 13, 2008 bench decision)
Digest Codes: PC 751.4
An initial determination held that Lakeshore was liable for
UI tax contributions based on an audit which had found that certain individuals
had provided services to Lakeshore for pay as its employees for purposes of the
UI Law. After a hearing, at which the Department of Workforce Development
appeared by counsel and argued in support of the determination, an Appeal
Tribunal affirmed the holding that Lakeshore was liable. Lakeshore petitioned
for commission review, and, after briefing by Lakeshore and DWD, the
commission's decision
affirmed the Appeal Tribunal.
Lakeshore timely commenced an action for judicial review of the commission’s
decision, but it named only LIRC as a defendant. LIRC filed a motion to dismiss
the action on the grounds that the court lacked competence to proceed because
DWD was an adverse party but had not been made a defendant as is required by
Wis. Stat. § 102.23(1)(a). Lakeshore the filed an Amended Summons and Complaint
making DWD a defendant; however, this Amended Summons and Complaint were filed
and served after the 30-day period for commencing a judicial review action had
expired.
Held: In a bench decision, the Court granted the motion to dismiss.
The Court concluded first that in this action, DWD was an “adverse party” within
the meaning of Wis. Stat. § 102.23(1)(a). The Court noted that the conclusion
that DWD was an adverse party was appropriate under each of the three tests for
“adverse party” status looked to by the Wisconsin Supreme Court in
Miller
Brewing Co. v. LIRC, 173 Wis. 2d 700, 495 N.W.2d 660 (1993), looking to whether
a party is one in whose favor an award has been made, one whose interest is in
conflict with the modification or reversal of the decision sought to be
reviewed, or one whose interests were adverse to the appellant during the
administrative proceedings.
The Court next concluded that Lakeshore’s failure to make DWD a party defendant
in the action was a defect that traveled to the heart of the court’s power to
act in the matter, requiring dismissal of the complaint. The Court held that
Nigbor v. DILHR, 120 Wis. 2d 375, 355 N.W.2d 532 (1984), a WC case in which the
defect was DILHR was made a defendant instead LIRC, and First Federal Savings
Bank, La Crosse-Madison v. LIRC, 200 Wis. 2d 786, 547 N.W.2d 796 (Ct. App.
1996), a UI Status case in which DWD was not made a defendant but DWD had notice
of and appeared in court by its own counsel in response to the complaint, were
both distinguishable. In this case, DWD was not served and had no notice of the
proceedings until the amended summons and complaint were served, and it was LIRC
which appeared in court, by its own counsel, to challenge the commencement of
the action, DWD’s counsel only making a special appearance after being served
with the amended summons and complaint.
Finally, the Court held that the amended summons and complaint purporting to add
DWD as a party defendant did not cure the defect because they were not filed and
served within the 30-day period after the issuance of the commission’s decision.
In order to properly invoke the authority of the court the steps required to
commence an action under § 102.23 must be taken within the 30-day time period
described in that statute, and if this is not done the court does not have
competence to proceed and cannot obtain it by attempts to cure the defect in
commencement of the action after the 30-day period has run.
Please note that this is a summary prepared by staff of the commission, not a verbatim reproduction of the court decision.
[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]