Opinion ID: 2063092
Heading Depth: 1
Heading Rank: 2

Heading: does the city of madison's insurance company have standing to challenge the constitutionality of sec. 102.03(4), stats.?

Text: The appellants assert that even if the City of Madison is barred from maintaining this action, Employers Mutual is a private corporation and as such has standing to challenge the constitutionality of the statute. This court has held that because the surety's obligation is derived from that of the principal debtor, the liability of the surety is ordinarily measured by the liability of the principal. Riley Construction Co. v. Schillmoeller & Krofl Co., 70 Wis.2d 900, 905, 236 N.W.2d 195 (1975). In Douglas County v. Industrial Comm., 275 Wis. 309, 315, 81 N.W.2d 807 (1957), this court held that municipalities can have no vested rights as against the state, citing Trenton v. New Jersey, 262 U.S. 182, 188, 43 S. Ct. 534, 67 L. Ed. 937 (1923): The power of the state, unrestrained by the contract clause or the fourteenth amendment, over the rights and property of cities held and used for `governmental purposes' cannot be questioned. In that case, Douglas County challenged as violative of the contract clause and the fourteenth amendment of the U.S. Constitution a retroactive application of a statute which eliminated the county's right to offset any pension annuity or death benefits payable against workmen's compensation death benefits. The court pointed out that the Workmen's Compensation Act required that any employer liable to pay compensation shall insure payment of such compensation in some company authorized to insure such liability in this state. . . Sec. 102.28 (2), Stats. (1951), and that the insurance contract shall be construed to grant full coverage of all liability of the assured under the Act. Sec. 102.31(1) (a). The same requirements are present in the 1941 [1] and 1973 [2] versions of the statute. The court in Douglas County commented . . . when an insurance company issues a policy of workmen's compensation insurance to a municipal corporation, such as a county, its obligation is to discharge the full liability of the insured municipality for workmen's compensation benefits, not merely such hypothetical benefits as may have been due under the statutes as they stood at the time the policy was issued or when some accident occurred. In other words, the company's contract under its policy is to pay whatever workmen's compensation benefits the legislature may have seen fit to impose upon the insured municipality. When the policy of coverage is so construed, there is no question of interference with vested rights, or impairment of the obligation of a contract, presented here. Id. at 319. [4] Thus, under the reasoning of Douglas County, the insurance company has no standing to challenge the constitutionality of the statute. By the Court. Order affirmed.