Court Opinion

ID: 9686040
Source: CourtListenerOpinion
Date Created: 2023-08-24 15:20:54.796972+00
Date Added: 2024-06-11T18:18:13.477242
License: Public Domain

JON E WILCOX, J.
¶ 94. {dissenting). In 1989 the legislature created the Uninsured Employer Fund *125(UEF) and the framework within which the Department of Workforce Development (DWD) administers it.1 1989 Wis. Act 64. At the time, Wis. Stat. § 102.18(1) (bp) (1987-88) had been the law of the state for almost a decade. When creating the UEF the legislature chose not to amend § 102.18(l)(bp) to include DWD and its agents as parties that could be penalized for their bad faith. In the subsequent eight legislative sessions, the legislature has also chosen not to make such an amendment.
¶ 95. Based on the legislature's policy choice, the Worker's Compensation Act (Act) does not provide a remedy for employees like Christopher Aslakson (Aslakson) alleging bad faith by an agent of DWD like Gallagher Bassett Services, Inc. (Gallagher Services). Faced with a lack of a remedy, the court concludes that the common-law tort of bad faith applies. Majority op., ¶ 86. That conclusion interferes with a policy decision made by, and properly left to, the legislature. Accordingly, I dissent.
I-H
¶ 96. The interplay between court decisions and legislative action concerning bad faith and worker's compensation law is crucial to determining whether Aslakson is barred from maintaining a bad faith tort claim against Gallagher Services. It leads to the conclusion that the legislature rejected the court recognized *126bad faith tort claim in the context of the Act. After derogating common law, and acting with full knowledge of existing law, the legislature made the policy choice not to amend § 102.18(l)(bp) to include DWD and its agents.
A
¶ 97. On October 31, 1978, this court recognized the tort of bad faith. Anderson v. Cont'l Ins. Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978). The court "conclude [d] that, upon the pleading of appropriate facts, an insured may assert a cause of action in tort against an insurer for the bad faith refusal to honor a claim of the insured." Id. at 680.
¶ 98. In the same term, and just over two months later, this court considered whether an injured employee could bring a claim arising out of alleged bad faith conduct of parties that refused to honor his worker's compensation claim. Coleman v. Am. Universal Ins. Co., 86 Wis. 2d 615, 623, 273 N.W.2d 220 (1979). The court concluded that the employee could bring a bad faith claim because at the time the Act did not cover the alleged injury. Id. at 623. In reaching its conclusion, the court noted the following:
[T]his action is based not on the original work-related injury but on a second and separate injury resulting from the intentional acts of the insurer and its agents while investigating and paying the claim. The Act does not cover the alleged injury, and the exclusivity provision does not bar the claim.
Id. Note the court's focus on whether the alleged injury had been addressed by the legislature. The court did not focus on whether the Act covered a particular class of defendants.
*127¶ 99. To determine that "[t]he Act did cover the alleged injury," the court considered the language of the Act in effect at the time of Coleman's injury. Id. at 622. The court quoted the exclusivity provision:" Where such conditions exist the right to the recovery of compensation pursuant to this chapter shall be the exclusive remedy against the employer and the workman's compensation insurance carrier.'" Id. (quoting Wis. Stat. § 102.03(2) (1973-74)). The court then listed the Wis. Stat. § 102.03(1) (1973-74) conditions that had to exist to make the worker's compensation remedy exclusive:
"(1) Liability under this chapter shall exist against an employer only where the following conditions concur:
(a) Where the employe sustains an injury.
(b) Where, at the time of the injury, both the employer and employe are subject to the provisions of this chapter.
(c) 1. Where, at the time of the injury, the employe is performing service growing out of and incidental to his employment....
(d) Where the injury is not intentionally self-inflicted.
(e) Where the accident or disease causing injury arises out of his employment."
Id. Determining that the alleged bad faith injury did not meet the conditions, the court concluded that the exclusivity provision found in § 102.03(2) did not bar Coleman's bad faith claim. Id. at 623.
¶ 100. Beyond simply considering whether Coleman's alleged bad faith injury met the conditions of § 102.03(1), the court considered whether other provisions of Wis. Stat. ch. 102 (1973-74) barred Coleman's *128claim. Specifically, it concluded that Wis. Stat. § 102.22 (1973-74), which imposed a penalty for late payments, did not bar Coleman's claim. Id. at 625. The court adopted the holding of other courts that "the statutory penalty for inexcusably late payment does not bar additional remedies for an intentional wrong going beyond the mere late payment." Id. at 626.
¶ 101. After a review of ch. 102, the court concluded that "[t]he plaintiffs claim for intentional wrongdoing is not covered." Id. At the time the court decided Coleman, ch. 102 lacked any mention of a claim of bad faith like Coleman's. In the absence of the legislature addressing the claim, the newly recognized tort of bad faith applied.
B
¶ 102. In 1981 the legislature responded to the court's Coleman decision by creating Wis. Stat. § 102.18(l)(bp) (1981-82). Majority op., ¶ 75. When enactments of the legislature conflict with the common law, like § 102.18(l)(bp) did with Coleman, statutes prevail. In re Voluntary Assignment of Milwaukee Sheep & Wool Co. v. Alm, 186 Wis. 320, 323, 202 N.W.2d 693 (1925) (stating "where the statute in any respect changes the rule or order existing under the common law, such provisions must prevail"); City of Madison v. DWD, 2002 WI App 199, ¶ 30, 257 Wis. 2d 348, 651 N.W.2d 292. However, for a statute to prevail, the change must be clearly expressed. Wisconsin Bridge & Iron Co. v. Indus. Comm'n, 233 Wis. 467, 474, 290 N.W.2d 199 (1940); NBZ, Inc. v. Pilarski, 185 Wis. 2d 827, 836, 520 N.W.2d 93 (Ct. App. 1994). When a statute lacks a clear expression, courts strictly construe it. Brown v. Loewenbach, 217 Wis. 379, 385, 258 N.W. 379 (1935); NBZ, 185 Wis. 2d at 836.
*129¶ 103. Wisconsin Stat. § 102.18(1)(bp) "specifically and explicitly provided an 'exclusive remedy' in the Worker's Compensation Act for bad faith claims against employers and their insurers," majority op., ¶ 75, in conflict with the court's recognition of the tort of bad faith in the context of the Act. Accordingly, it constitutes a derogation of common law. The statute supplanted the tort of bad faith in the context of worker's compensation law. Rather than injured employees having a common-law claim to litigate in the courts, the legislature granted DWD the power to penalize an employer or insurance carrier for malice or bad faith.
¶ 104. While the Coleman court of 1978 accurately stated that "[t]he Act does not cover the alleged injury," Coleman, 86 Wis. 2d at 623, the same could no longer be said after the legislature's creation of § 102.18(l)(bp). In creating § 102.18(l)(bp), the legislature spoke on how it desired for bad faith to be handled in the context of the Act. Absent further action by the legislature, the tort of bad faith no longer applied in worker's compensation law after the legislature enacted § 102.18(l)(bp).
¶ 105. Contrary to the majority's assertion, this case is not like Coleman, majority op., ¶ 79, due to the enactment of § 102.18(l)(bp). In Coleman, the court could state that "[t]he Act does not cover the alleged injury" of bad faith. Coleman, 86 Wis. 2d at 623. With the creation of § 102.18(l)(bp), which covers an alleged injury of bad faith, the majority cannot rely on the same rationale used in Coleman.
C
¶ 106. Within ten years of creating Wis. Stat. § 102.18(l)(bp), the legislature created the Uninsured Employers Fund (UEF). 1989 Wis. Act 64, § 55. Courts *130presume that the legislature acts with full knowledge of existing laws. E.g. Peters v. Menard, Inc., 224 Wis. 2d 174, 187, 589 N.W.2d 395 (1999). Accordingly, it should be presumed that the legislature had a full understanding of worker's compensation law, including § 102.18(1)(bp), when it enacted Act 64.
¶ 107. Act 64 made over 45 changes to Wis. Stat. ch. 102. 1989 Wis. Act 64. One of the changes included 1989 Wis. Act 64, § 37, which amended Wis. Stat. § 102.18(l)(bw). Before Act 64, § 102.18(l)(bw) (1987-88) read as follows:
If an insurer or self-insured employer pays compensation to an employe in excess of its liability and another insurer is liable for all or part of the excess payment, the department may order the insurer or self-insured employer that is liable to reimburse the insurer or self-insured employer that made the excess payment.
Act 64 made the following changes to § 102.18(l)(bw):
If an insurer er,_a self-insured employer or, if applicable, the uninsured employers fund pays compensation to an employe in excess of its liability and another insurer is liable for all or part of the excess payment, the department may order the insurer or self-insured employer that is liable to reimburse the insurer or self-insured employer that made the excess payment or, if applicable, the uninsured employers fund.
1989 Wis. Act 64, § 37. The legislature apparently made the policy choice to amend § 102.18(l)(bw) to address its creation of the UEF in 1989 Wis. Act 64, § 55.
¶ 108. One thing that the legislature did not do in enacting Act 64 was amend § 102.18(l)(bp). See 1989 Wis. Act 64. Even though the legislature was creating the UEF, which would put DWD and its agents in a position to process worker's compensation claims, it did *131not include DWD and its agents as parties that could be penalized for acting in bad faith under § 102.18(l)(bp). Based on the amendment to § 102.18(l)(bw), the subsection immediately below § 102.18(l)(bp) in the statutes, the legislature seemingly appreciated that the creation of the UEF would have an impact on various parts of ch. 102. Yet, the legislature chose not to amend § 102.18(1)(bp) when it created the UEF. It also chose not to amend § 102.18(l)(bp) in the eight legislative sessions since it created the UEF.
¶ 109. The legislature is the branch of government suited for making such policy decisions. " 'Public policy on a given subject is determined either by the constitution itself or by statutes passed within constitutional limitations.... When acting within constitutional limitations, the legislature settles and declares the public policy of a state, and not the court.'" Progressive N. Ins. Co. v. Romanshek, 2005 WI 67, ¶ 60, 281 Wis. 2d 300, 697 N.W.2d 417 (quoting Borgnis v. Falk Co., 147 Wis. 327, 351, 133 N.W. 209 (1911)). "[W]hen the legislature has acted, 'the judiciary is limited to applying the policy the legislature has chosen to enact, and may not impose its own policy choices.'" Id. (quoting Fandrey v. Am. Family Mut. Ins. Co., 2004 WI 62, ¶ 16, 272 Wis. 2d 46, 680 N.W.2d 345).
¶ 110. Based on the legislature's derogation of common law when it created § 102.18(l)(bp), injured employees alleging bad faith are barred from maintaining a common law bad faith claim. Based on the legislature's decision not to amend § 102.18(1) (bp) to include DWD and its agents for nine consecutive sessions, DWD and its agents are not subject to a bad faith penalty. Following the well-established rules about the derogation of common law and the presumption that the legislature acts with full knowledge of the law, one *132would conclude that until the legislature acts to indicate otherwise, injured employees alleging bad faith against DWD or its agents are left without a remedy.
r — i HH
¶ 111. After the legislature rebuffed this court's conclusion that the tort of bad faith should apply in the context of worker's compensation law, it sent a message about its policy choice. When the legislature decided not to include DWD and its agents as parties subject to § 102.18(l)(bp) penalties for nine consecutive sessions, it sent a message about its policy choice. In spite of this message, the court has made it own policy decision.
¶ 112. For the forgoing reasons, I respectfully dissent.

 When the legislature enacted 1989 Wisconsin Act 64, it directed the Department of Industry, Labor and Human Relations (DILHR) to administer the Uninsured Employer Fund. In 1996 the Department of Workforce Development (DWD) replaced DILHR. This dissent uses "DWD" to refer to the entity in existence at the time pertinent to the context within which it is used.