One-Hundred and Second Regular Session
FRIDAY, January 9, 2015
The Chief Clerk makes the following entries under the above date.
_____________
Petitions and Communications
State of Wisconsin
Claims Board
December 23, 2014
Enclosed is the report of the State Claims Board covering the claims heard on December 9, 2014.Those claims approved for payment pursuant to the provisions of s.16.007 and 775.05 Stats., have been paid directly by the Board.
This report is for the information of the Legislature, The Board would appreciate your acceptance and publication of it in the Journal to inform the members of the Legislature.
Sincerely,
GREGORY D. MURRAY
Secretary
STATE OF WISCONSIN CLAIMS BOARD
The State of Wisconsin Claims Board conducted hearings at the State Capitol Building in Madison, Wisconsin, on December 9, 2014, upon the following claims:
Claimant Agency Amount
11.
Marek & Stella Transportation $26,610.77 Szymanski
22.
David Albino University of $3,748.97 Wisconsin
33.
Maxwell Verkuilen Innocent Convict $450,000.00 Compensation
44.
Canadian Pacific Transportation $500,715.13 Railway
The following claims were decided without hearings:
Claimant Agency Amount
55.
Pastori Balele Revenue $5,661.30 66.
Charles Sheppard Corrections $110.00 77.
Hortense Lewallen Transportation $93.84 88.
Antonio Ferrer Transportation $500.00 The Board Finds:
1. Marek & Stella Szymanski of Lake Delton, Wisconsin claim $26,610.77 for lost income and property damage caused by flooding and road closures allegedly related to a DOT road project in Wisconsin Dells. The second phase of the project took place from March to July 2013. This phase completed the westbound lanes of USH 12, the east Frontage Road (FR) and other connections to USH 12. The claimants’ restaurant and motel are located on the west side of the FR. The claimants state that they had to close their restaurant due for 12 days due flooding on 6/13/13 and again for 8 days due to additional flooding on 6/25/13.
The claimants allege that DOT miscalculated the potential stormwater runoff from the hill on the east side of the FR. They state that the project removed the drainage ditch formerly on the east side of the FR, so that stormwater no longer ran down the ditch, but instead crossed the FR and came onto their property. The claimants state that during construction, DOT completely blocked off the only catch basin and the storm sewer on the east side of the FR, which should have been left open to catch stormwater runoff. The claimants state that prior to the project, there were no curb/gutters on the west side of the FR. The project design included adding curb/gutters on the west side of the FR, so the claimants requested a curb cutout on their property so they could maintain street access for deliveries and moving dumpsters. The claimants point to the fact that they are not engineers and, because they were unaware of DOT’s project design errors, could not have anticipated this cutout would increase the risk of flooding on their property.
From June 12-13, 2013, the Wisconsin Dells area received 3.2 inches of rain and the claimants’ restaurant and the basement of their motel flooded. The claimants allege that sound engineering and construction practices would have accommodated this rainfall but that because DOT had covered up access to the drainage system, their property was damaged. The claimants point to the fact that after the flooding, DOT took multiple steps to correct the problem, including paying to clean the restaurant and replace flooring and damaged equipment, installing an additional catch basin and a drainage ditch on the west side of the FR, and replacing the curb cutout on the claimants’ property with curb/gutter and an elevated concrete pad to accommodate the claimants’ dumpsters. The claimants have not pursued a claim against the project contractor because they believe it was DOT’s project design errors that caused the flooding problem.
The claimants dispute DOT’s assertion that its employees observed no flooding or damage in the motel basement. The claimants state that two DOT employees inspected the motel basement and took pictures of the water and property damage there. The claimants note that DOT has failed to provide copies of these pictures. The claimants also state DOT’s allegation that the claimants never mentioned the loss of food/perishables in the restaurant is false and its analysis of how the loss occurred inaccurate. The claimants state that the cleaning company hired by DOT to clean the restaurant installed large fans with heating units to dry the space. Unbeknownst to the claimants, the fans/heaters were improperly calibrated by the cleaners and left on overnight. When the claimants returned the next morning, the heat in the restaurant was so high that the refrigerator/freezer unit broke down and the contents were lost. The claimants note that DOT paid to replace the broken fridge/freezer unit. The claimants believe it is ridiculous for DOT to accept fault for damage of the unit but not the contents therein. The claimants also state that a DOT employee took pictures of the food that was lost but again, DOT has failed to provide those pictures.
The claimants state that DOT’s assertion that it reached some type of settlement/compromise with the claimants is false. The claimants point to the fact that DOT has provided no written documentation which shows that the initial repair and clean-up costs paid by DOT constituted a settlement of claim.
The claimants also request compensation for lost profits from May 2013, during which time they allege access to their property was severely limited by the construction project. The claimants discussed the lack of access with the contractor and steps were eventually taken to cure the entrance problems, but not before the business had been closed for 11 days due to lack of access.
The claimants state that they were unaware of the 120-day limit for filing a claim with DOT for additional damages. The claimants requested the necessary forms from DOT in September and received the forms approximately two-weeks before the expiration of the 120-day time limit. The claimants state that their claim to DOT was submitted late because they were unaware of the 120-day deadline and because it took more than two weeks to gather documentation to support their claim for the additional damages.
DOT recommends denial of this claim. DOT denies that there were errors calculating the stormwater runoff and states that the project was reasonably designed and executed to handle historically average rainfall events. DOT states that, contrary to the claimants’ assertions, the project had appropriate stormwater drainage and that access to the catch basin and storm sewer was never intentionally blocked. DOT states that, per DNR requirements, the contractor installed silt fencing to reduce the amount of fine material entering waterways but that during the unusually heavy rain event of June 12-13, the silt fencing became plugged. DOT notes that historically, the area receives an average rainfall of 4.69 inches for the entire month of June, therefore, the 3.2 inches that fell in the 24 hours prior to the flooding was an unanticipated amount of rain.
DOT does not dispute that the claimants’ restaurant was flooded after this heavy rain event. DOT points to the fact that, despite the department’s immunity protection, project staff agreed to assist the claimants with cleanup of the restaurant and replacement of damaged equipment. DOT states this was done as a goodwill effort to assist the claimants’ neighborhood business. DOT notes that the cost for these repairs and replacements was $66,900.14. DOT states that this money was paid from road-project funds and did not go through the risk management process. DOT therefore believes the claimants have already been adequately compensated for their flooding-related losses. DOT believes the claimants’ allegations of lost profits due to flooding have not been adequately documented.
DOT states that two DOT employees toured the property and found no similar flooding damage at the claimants’ motel. DOT believes the claim for lost food/perishable items at the restaurant should be denied because it was the claimants’ responsibility to ensure their freezers were working properly during the cleanup.
DOT also alleges that the claimants share some responsibility for the flooding because they requested DOT alter the original curb/gutter design on the west side of the FR to include a curb cutout. DOT states that if this cutout had not been added, the curb would have kept water away from the claimants’ property and the flooding would not have occurred.
Finally, DOT believes the claimants have not proven their claim of lost profits due to restricted property access during the construction project. DOT states that any road project has an impact on traffic flow, but that access to the claimants’ property was not completely closed at any point in the project.
DOT believes there was no negligence on the part of any DOT employee or contractor during this project and that the claimants have been reasonably compensated for appropriately documented damages caused by the June 13 flooding event. DOT states that the claimants’ claim to DOT for additional damages was denied by DOT Risk Management because it was received after the 120-day limit for filing a claim had expired.
The Board concludes the claim should be paid in the reduced amount of $10,000.00 based on equitable principles. The Board finds that the claimants have shown negligence on the part of DOT and that DOT’s failure to follow appropriate internal policies and risk management protocols exacerbated the issues surrounding this claim. The Board further concludes, under authority of § 16.007(6m), Stats., payment should be made from the Department of Transportation appropriation § 20.395(9)(qh), Stats. 2. David Albino of Madison, Wisconsin claims $$3,748.97 for reimbursement of GI Bill tuition amount awarded by VA but later required to be paid back by claimant, allegedly due to UW’s mistaken interpretation of federal and state law.
Claimant is a student at UW-Madison and is eligible for non-veteran Post-9/11 GI Bill benefits due to his father’s military service. The claimant is also employed as a TA at UW. UW sent the claimant’s information, including the cost of full tuition, to the VA for calculation of his GI Bill benefits for the fall 2013 semester. The VA remitted a benefit of $3,965.22. From this amount, the claimant paid the $565.04 balance he owed for segregated fees after his TA tuition remission reduced his fall 2013 tuition and fees to that amount. UW refunded to the claimant the remaining $3,400.18 on 9/9/13. The claimant used the refunded money to pay various living expenses.
In January 2014, UW contacted the claimant and told him they had erred in sending the full tuition amount to the VA and that they were resubmitting his tuition amount to the VA with his TA tuition remission subtracted from the full tuition. The VA responded with a corrected benefit amount of $377.90 based on the information submitted by UW. UW told the claimant he had to reimburse the UW for the $3,587.32 “overpayment” for his tuition. The claimant was required to reimburse UW before he could register for the spring 2014 semester. Because the money had already been spent, he took out a loan to cover the cost.
The claimant disputes UW’s assertion that the TA tuition remission constituted a “tuition waiver” specifically designated for the sole purpose of defraying tuition and fees. The claimant notes that nowhere in state statute is the purpose of the TA tuition remission defined in this manner. The claimant states that the tuition remission is part of a TA’s compensation package and, therefore, its sole purpose is not the defraying of tuition and fees. In support of this position, the claimant points to Negotiating Note No. 6 of the Agreement between UW and the Teaching Assistants’ Association in existence prior to 2011 WI Act 10, which states: “[c]onsistent with legislative intent, the remission will achieve equity with counterparts at our peer institutions and will eliminate a serious impediment at UW Madison to attracting the highest quality graduate students. The contract terms, reflecting that legislative intent, establish a level of reasonable compensation and other benefits which were derived from comparisons with our peer institutions.” The claimant points to federal IRS regulations, which consider tuition reductions provided to an employee to be a form of compensation. The claimant notes that the only reason the IRS considers such compensation non-taxable is because graduate level tuition remission compensation is specifically exempted from taxable income under Chapter 26 U.S.C. § 117 as a “qualified scholarship.” The claimant states that, despite this exemption, the IRS considers tuition remission as compensation. The claimant believes UW is deliberately ignoring federal law when making its argument. The claimant alleges that the UW has not contacted the VA to inquire as to whether the UW is correctly interpreting federal rules regarding this matter. The claimant states that educational assistance under the Post-9/11 GI Bill (38 U.S.C. § 3313) is net of any tuition remission specifically designated for the sole purpose of defraying tuition and fees, which is clearly not the sole purpose of the TA remission. The claimant points to the fact that the VA pays full tuition benefits even when tuition is paid by Title IV funds (such as Pell grants or loans), scholarships, or other aid that is not designated specifically for the sole purpose of defraying tuition and fees. The claimant notes that under UW’s definition of tuition remission, these funding sources would also be reportable as additional non-GI Bill funds even though the statute specifically excludes such funding from consideration.
Finally, the claimant states that this is not a matter of “simple overpayment” as alleged by UW. The claimant states that UW adjusted the tuition amount submitted to the VA in error and that this error created a debt between UW and the VA. The claimant believes UW had no authority to transfer that debt—created by UW’s own error—to the claimant.
UW recommends denial of this claim. UW states there is no merit to the claimant’s argument that the TA tuition remission constitutes wages. UW states that TAs receive a separate stipend (the amount of which is determined based on a comparison of stipends at peer institutions) for their services, which constitutes their taxable wage. UW states that a separate state statute requires the university to also remit tuition for TAs in certain circumstances, but does not identify that remission as “wages.” UW notes that it makes tuition remission available to other graduate assistants (such as research assistants) who are not considered UW employees. UW states that the sole purpose of this tuition waiver is defraying tuition and fees.
UW notes that, under IRS regulations, the tuition remission is considered a form of scholarship and therefore TAs are not taxed on the value of their tuition remission. UW states that it is not ignoring federal law but rather following the requirements of the IRS and other statutory regulations.
UW points to the fact that under the Post-9/11 GI Bill, the claimant received three awards, one for housing, one for books, and the amount disputed in this claim for tuition. UW states that it appears the claimant inappropriately spent his tuition benefit award on non-tuition related expenses such as housing and bills.
UW states that the tuition waiver provided to the claimant meets the definition under Section 103 of the Veterans Educational Assistance Improvements Act of 2010 for “waivers, scholarship, aid, or assistance provided directly to the institution and specifically designated for the sole purpose of defraying tuition and fees.” Therefore, the amount of the tuition waiver needed to be reported to the VA for proper calculation of the claimant’s VA benefit. UW states that the initial application for benefits included the full amount of tuition in error and that pursuant to federal regulations; UW was required to submit the corrected amount as soon as the error was discovered. UW notes that, although it is quite rare that corrections are necessary for students receiving Post-9/11 GI Bill benefits, it does occasionally happen. For example, if a student adds or drops a class, has a change in residency status, withdraws from UW, or has a change in other tuition restricted funds, UW is required to submit an adjusted benefit application to the VA.
UW believes that this is a simple case of overpayment and that, regardless of whether an overpayment is made to a student or an employee, that individual is not entitled to keep the funds. UW believes that the claimant’s position—that he is entitled to receive both a tuition waiver from UW as well as funding from the VA to pay tuition—is untenable and would result in double dipping, which is neither logical nor allowed by the VA. UW notes that it has consulted with the VA regarding the issues involved in this claim because they have been raised in prior instances. Finally, UW states that because the claimant was the recipient of a benefit to which he was not legally entitled, the claimant is responsible for reimbursing that amount to the university. To require UW to bear this expense would unjustly enrich the claimant at the expense of other students and state taxpayers.
