One-Hundred and Second Regular Session
TUESDAY, November 8, 2016
The Chief Clerk makes the following entries under the above date.
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Petitions and Communications
State of Wisconsin
Legislative Reference Bureau
November 8, 2016
The Honorable, the Legislature:
The following rules have been published in the October 31, 2016Wisconsin Administrative Register No. 730: Clearinghouse Rules Effective Date(s)
Sincerely,
BRUCE J. HOESLY
Senior Legislative Attorney/Code Editor
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State of Wisconsin
Wisconsin Ethics Commission
November 8, 2016
The Honorable, the Senate:
Pursuant to Wis. Stats. §13.685 (7), we are providing the enclosed information. Please visit the Government Accountability Board’s Eye on Lobbying web site, https://lobbying.wi.gov, for more detailed information about lobbyists, lobbying principals (organizations), and state agency liaisons. McDermott, Catherine Badger State Sheriffs’ Association
Pirlot, Randall Badger State Sheriffs’ Association
Sincerely,
BRIAN BELL
Administrator
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State of Wisconsin
Claims Board
November 2, 2016
Enclosed is the report of the State Claims Board covering the claims heard on October 13, 2016. 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 October 13, 2016, upon the following claims:
Claimant Agency Amount
11.
Monroe & Weisbrod University $24,000.00 of Wisconsin
2. Ronald Fouts Administration $48,637.73
3. George & Sharon Transportation $7,500.00
Thuecks
4. Donna Cvetan Revenue $6,487.12+
The following claims were decided without hearings:
Claimant Agency Amount
5. Thomas Hetzel Revenue $38,377.67
6. Larry E. Jones Revenue $9,307.60
7. Renee Miller Transportation $3,524.44
8. Bill Ross Transportation $3,286.00
9. DeAndre Johnson Corrections $199.00
10. Izelia A. Golatt Corrections $18.88
11. Mark Brown Corrections $19.93
12. Antonia D. Manns Corrections $220.00
The Board Finds:
1. Monroe & Weisbrod of Austin, Texas, claims $24,000.00 for monies allegedly owed for recruitment services performed by the claimant for the UW. In October 2013, the UW contracted with the claimant to provide psychiatrist recruitment services for two positions at UW-Madison University Health Services (UHS). The search began in November 2013. In December 2013, the claimant began discussions with Dr. Claudia Reardon regarding one of the positions. Because Dr. Reardon worked elsewhere at the UW, the claimant contacted UHS to clarify that Dr. Reardon would be considered a “hire” under the contract. Dr. Van Orman at UHS confirmed that Dr. Reardon would be considered a new hire even though she already worked at the University. In February 2014, Dr. Reardon declined one of the positions and removed herself from consideration. As part of its recruitment work, the claimant sent a series of “auto-drip” emails to Dr. Reardon regarding whether she had reconsidered accepting the position. Auto-drip emails were sent in May, August, and November of 2014, and February of 2015. During this period the claimant successfully recruited two psychiatrists for UHS. Later in 2015, the claimant saw on UHS’s webpage that Dr. Reardon had been appointed to a part-time position at UHS. The claimant contacted Dr. Van Orman at UHS regarding whether the hire of Dr. Reardon was covered under their contract with UW. Dr. Van Orman agreed that Dr. Reardon’s hire was conducted under that contract and told the claimant to send an invoice for the placement fee. The claimant’s placement fee for a single hire is $24,000 and the claimant sent an invoice in that amount to the UW. In December 2014, the UW informed the claimant that it could not pay the invoice because the purchase order related to their contract was closed and that they could not issue payment without a purchase order.The claimant states that the UW has received the benefit of the claimant’s work recruiting Dr. Reardon but the claimant received no payment for their work. The claimant believes they are due this money under the theories of quantum meruit and unjust enrichment. The claimant states that it reasonably relied on the assurances made by Dr. Van Orman that Dr. Reardon’s recruitment was legitimate work under the contract and that her eventual hire was related to the contract. The claimant believes the UW has been unjustly enriched and requests payment of its single hire fee of $24,000.
The UW recommends denial of this claim. The UW points to the terms of the contract, which called for a 12 month search to fill two positions. Under the contract the claimant was paid a $10,000 flat fee, two $17,000 placement fees, and approximately $2,000 for expenses. UW notes that the search began in November 2013; therefore, the contract expired in November 2014. The UW states that Dr. Van Orman misinterpreted the contract when she stated that Dr. Reardon would be considered a “new hire.” Because Dr. Reardon already worked for the UW, her eventual appointment to a part time position at UHS was, in fact, a partial transfer, not a new hire. In addition, UW points to the fact that neither Dr. Van Orman nor anyone else at UW ever agreed to extend the terms of the contract past one year and Dr. Reardon’s transfer occurred after the expiration of the contract. Dr. Van Orman was not authorized to modify the terms of the contract and the purchase order clearly stated that no modifications could be made without the authorization of UW purchasing services. The UW also believes it is unreasonable to interpret the contract as allowing the claimant to indefinitely lay claim to individuals the claimant contacted during the original search. The claimant made contact with a number of individuals during the search who were not hired. Are they forever to be considered as falling under the claimant’s contract simply because the claimant continues to send them “auto-drip” emails? UW also points to the fact that the theories of quantum meruit and unjust enrichment do not apply when there is a valid contract in place. And even if they did apply, the claimant has provided no evidence of any work done in addition to the work completed under the contract, for which the claimant has already received $46,000. The claimant’s discussions with Dr. Reardon were performed under the original contract which has been paid in full. The claimant’s only additional contact with Dr. Reardon after the original recruitment was in the form of two automatically generated emails. The claimant cannot justify a fee of $24,000 for sending two emails. Finally, UW notes that $24,000 placement fee requested by the claimant is 7,000 more than the placement fee negotiated under the original contract. UW believes that the claimant has presented no evidence that the partial transfer of Dr. Reardon to UHS after the expiration of the contract, was included in the original contract terms, or that it was a separate search conducted by the claimant in addition to the original contract, for which additional payment is due.
The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employees and this claim is neither one for which the state is legally liable nor one which the state should assume and pay based on equitable principles.
2. Ronald Fouts of Madison, Wisconsin, claims $48,637.73 for monies allegedly owed by DOA in relation to a 2008 flooding event in the City of Beaver Dam. The claimant owned four buildings that were flooded. The claimant states that his buildings were not damaged by the flood and passed inspections after they were cleaned up. The claimant alleges that the city wanted to create a TIF district for a condominium project and that the only way they could do so was by falsely labeling his buildings and others as blighted. The claimant alleges that the city and DNR made public announcements that the buildings were going to be torn down and that because of these announcements; he was unable to rent his buildings. The claimant states that the city told him he must either sell his buildings or be forced to tear them down at his own expense. He denies that the sale was voluntary or that he approached the city about selling the buildings. The claimant believes this was an unjust taking of his property. The claimant hired an attorney to protect his rights but was forced to sell the buildings to the city in 2009 at the 2008 appraised value. The claimant states that he was never informed of the availability of federal relocation funds. In 2012, the Department of Housing and Urban Development (HUD) contacted DOA, the claimant alleges, to correct DOA’s illegal actions. The claimant notes that DOA’s own staff person told them that what they were doing was illegal. DOA hired a contractor to determine if the building owners were eligible for federal relocation and acquisition funds. The claimant disputes DOA’s assertion that this person was “independent,” noting that he was paid money by DOA. Finally, the claimant points to HUD’s 6/15/16 letter to DOA, which he alleges proves that DOA broke state and federal law.
DOA recommends denial of this claim. DOA states that following the June 2008 flooding, a group of building owners, including the claimant, approached the city regarding selling their flood-damaged buildings. The city agreed to purchase the buildings at the appraised value. In June 2009, the city received a grant which included federal monies to be used (in part) to reimburse the city for the property purchases. In December 2012, HUD informed the state that because the city received federal money, they should have made payments to the property owners pursuant to the Uniform Relocation Act (URA). In response to this information, DOA hired an independent contractor to determine what additional monies were due to the building owners under the URA. Based on the contractor’s work, DOA approved the maximum for all payments that were justified under the URA. The claimant received an additional $20,000. DOA states that the current claim is for payment of expenses which the contractor determined to be ineligible. The claimant appealed this determination and the appeal was denied. The claimant could have petitioned for judicial review under Ch. 227 but failed to do so. DOA believes this claim exemplifies the old saying “no good deed goes unpunished.” Had the city refused to purchase the flood-damaged properties, it would never have been obligated to pay relocation benefits to the claimant. DOA states that the claimant has received the full, pre-flood fair market value of his properties, plus all additional monies required by law. Finally, DOA points to HUD’s 6/15/16 letter, which states “HUD is very pleased with the State’s continued diligence in addressing the Beaver Dam acquisition and relocation project deficiencies. Actions taken by DOA to resolve the Findings have been excellent.” The Board defers decision of this claim at this time so that additional information may be obtained from the claimant and DOA. [Member Green not participating.]
3. George and Sharon Thuecks of Nekoosa, Wisconsin, claim $7,500.00 for the collateral value of a motorcycle allegedly lost due to a title error by DOT. On 8/30/13 the claimants entered into a contract to sell a motorcycle to Gina Langridge for the amount of $7,500. On 9/4/13 a title application was submitted to DOT with Ms. Langridge listed as the owner and the claimants listed as lienholders. Ms. Langridge made the agreed payments on the motorcycle until 2/19/15. Sometime prior to 3/31/15, Ms. Langridge sold the motorcycle to a new owner. Upon not receiving payments, the claimants discovered that Ms. Langridge had sold the bike, which was now registered in Illinois with a clean title. The claimants requested a copy of the Wisconsin title for which Ms. Langridge applied on 9/4/13 and discovered that, despite the fact that the claimants were listed as lienholders on the title application, DOT had not added them as such when it issued the title. The claimants state that Ms. Langridge would not have been able to sell the motorcycle had DOT not issued an incorrect title. The claimants state that but for DOT’s error, they could have recovered the bike and resold it when Ms. Landgridge stopped making payments. Because DOT has admitted the title error, the claimants believe they should be reimbursed for the full sale value of the motorcycle, which they lost due to DOT’s error.
DOT recommends denial of this claim. DOT acknowledges an error was made when an employee failed to list the claimants as lienholders on the title issued to Ms. Langridge. However, DOT believes the primary cause of the claimants’ damages is Ms. Langridge’s failure to make the payments required by the contract. Ms. Langridge then sold the motorcycle with full knowledge that she still owed the remaining payments to the claimants. DOT notes that at the time of default, the remaining balance for the bike was $1800 with $200 in late fees. DOT states that it is not the state’s responsibility to enforce the contract between the claimants and Ms. Langridge. DOT also notes that the claimants have been awarded a $2000+ judgment against Ms. Langridge for the remaining payments and fees. When Ms. Langridge pays the court-ordered judgement, the claimants will be made whole. Awarding an additional $7500 would make the claimants better than whole as they would be paid twice for the motorcycle, once by Ms. Langridge and once by the state. Finally, DOT notes that, pursuant to Wis. Stat. § 342.19, lien holders receive a copy of an issued title. Being lienholders, the claimants would have known this information and should have contacted DOT when they did not receive a copy of the title back in September 2013. DOT regrets the titling error but does not believe it was the primary cause of the claimants’ losses. The Board concludes the claim should be paid in the reduced amount of $2,000.00 based on equitable principles. The Board further concludes, under authority of § 16.007 (6m), Stats., payment should be made from the Department of Transportation appropriation § 20.395(5)(cq), Stats. 4. Donna Cvetan of Sheboygan, Wisconsin, claims $6,487.12+ for return of amounts garnished from her wages for a tax liability for which the claimant believes she is not liable. The claimant and her husband entered into a Marital Property Agreement in 1994, which clearly states that D&M Plumbing & Heating, which claimant’s husband owned for many years prior to the marriage, was his individual property. The claimant points to Section 4.1.b. of the Agreement, which provides that “without any obligation or liability on the part of the other” party, each party is responsible for “debts, obligations, taxes, assessments, and expenses at any time incurred…relating to the acquisition, holding, disposition, operation, management, or administration of his or her solely owned property.” The claimant states that during a routine audit of D&M, it was discovered that some sales and use taxes had inadvertently not been paid. The claimant states that she has never had any involvement whatsoever in D&M and points to Section 4.4. of the Agreement, which states that “each party shall have full and exclusive powers of management and control over the property classified as his or her individual property...free from all rights, claims, or property interests of the other…” The claimant points to the fact that the Agreement also provides “that the classification of [her husband’s] W-2 wages as marital shall not constitute a ‘mixing’ of marital and individual property” (Section 2.1.a.). D&M Plumbing & Heating closed in February 2015. DOR began garnishing 25% of the claimant’s wages in June 2015 to recover the sales and use taxes owed by D&M. The claimant believes that the Marital Property Agreement clearly states that she is not responsible for payment of these taxes. She requests reimbursement of all monies garnisheed by DOR and that DOR cease any further garnishment of her wages for payment of this debt. As of the date this claim was filed, October 28, 2015, the DOR garnishment totaled $6,487.12.
DOR recommends denial of this claim. DOR states that, pursuant to § 71.10(6)(c), Wis. Stats., “no provision of a marital property agreement…adversely affects the interest of a creditor unless the creditor had actual knowledge of that provision when the obligation to that creditor was incurred.” DOR did not receive a copy of the claimants’ MPA until well after the sales tax debt was assessed against Mr. Cvetan. Therefore, the MPA had no impact on the tax obligation. DOR notes that, even had the MPA been timely filed with DOR, the MPA categorizes Ms. Cvetan’s wages as marital property, not individual property. DOR points to § 71.91(3), Stats., which provides that all tax obligations incurred during a marriage by a spouse are incurred in the interest of the marriage and may be satisfied under Wis. Stat. § 766.55(2)(b). § 766.55(2)(b) provides that an obligation incurred by a spouse in the interest of the marriage may be satisfied from all property of the incurring spouse and all marital property. DOR states that it has appropriately followed the law with regards to this matter and recommends denial of the claim. The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employees and this claim is neither one for which the state is legally liable nor one which the state should assume and pay based on equitable principles.
5. Thomas Hetzel of Kenosha, Wisconsin, claims $38,377.67 for refund of overpayment of taxes for 2004. Prior to 2002, the claimant’s only sources of income were non-taxable SSDI and a non-taxable disability pension from the Veterans’ Administration. In 2002, the claimant received a sizeable inheritance from his mother’s estate. The claimant states that he used this money to engage in options and day trading in the stock market over the next several years. The claimant states that he eventually lost all of the inheritance money through this activity. The claimant states that, because he incurred more losses than gains and had no other taxable income during these years, he knew there would be no taxes due and did not file income taxes for any of the years involved. Despite the fact that he had no net capital gains during these years, the 1099-B forms reported to DOR only showed the amount of the sale and not the related cost basis. The claimant alleges that despite the fact that DOR was aware there would be a cost basis involved, the department issued a tax assessment based on the total amount of the sale reported on the 1099-B forms. The claimant alleges that DOR knew this would grossly overstate the amount of reportable income. DOR levied $38,713.64 from the claimant’s accounts. The claimant states that he asked DOR to release the levy in March 2014 because he was in the process of preparing the missing tax returns but that DOR refused to release the levy. All three levies issued by DOR were applied to tax year 2004. When filed, the 2004 return resulted in a tax due of $108, resulting in an overpayment of $38,377.67. The claimant notes that DOR is adopting federal regulations, which allow for refund of income tax overpayments if the request is made within two years of the date the payment is made, even if the tax year is outside the statute of limitations. The claimant believes DOR has been unjustly enriched by the overpayment and requests reimbursement.
