Cattau v. National Insurance Services of Wisconsin, Inc.

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The Supreme Court affirmed the decision of the court of appeals affirming the circuit court's dismissal of Plaintiffs' claims alleging mismanagement of their retirement benefits, holding that, despite the court of appeals' erroneous holding that Data Key Partners v. Permira Advisers LLC, 849 N.W.2d 693 (Wis. 2014), has created a new pleading standard in Wisconsin, Plaintiffs failed to state a claim upon which relief may be granted.

In affirming the circuit court's dismissal, the court of appeals held (1) the Supreme Court's decision in Data Key created a new, heightened pleading standard in Wisconsin; and (2) under this new standard, Plaintiffs failed to state a claim upon which relief may be granted. The Supreme Court affirmed, holding (1) this Court unanimously concludes that the decision in Data Key did not change Wisconsin's pleading standard, as articulated in Strid v. Converse, 331 N.W.2d 350 (Wis. 1983); but (2) the Court is equally divided as to whether Plaintiffs stated a claim based on the Data Key/Strid standard, and therefore, the court of appeals' decision is affirmed.

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2019 WI 46 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2016AP493 Ann Cattau, Thomas M. Beck, Linda Beckwith, Ardyth Bergstrom, Vicki Christman, Gail W. Cismoski,Kathleen A. Curtis, Janice DeMenter, John Dobbins, Elsie Evenson, Kris Grasley, Gary Haffeman, Kristine Haffeman, Kathy J. Hager, Gail Harrmann, Joann Harrell, Mary Louise Hildebrandt, Lexann Hitchcock, Jo Anne Holden, Karla M. Huston, Susan R. Johnson, Mary K. Jones, Dorothi A. Karisny, Chuck Knoeck, Lawrence H. Krebs, Diane D. Krueger, Helen L. Kurka, Judith J. Kurka Nagel, James Lantz, Jane E. Lantz, Thomas Marzahl, Mary Joy Mayer, Marjorie R. Murphy, Bruce C. Nufer, Anna P. Olson, Sharon O'Reilly, Patricia Ormston, Mark Peerenboom, Sue Peterson, James S. Piepenbrink, Anna Mae Prem, Jane Reimer, Mary J. Resch, Cynthia A. Rieck, Dianne Roth, Lucy Rumpf, Susan M. Schug, David K. Sebora, Suann M. Senso, Karla Sheehan, Sandra L. Smith, Robin L. Snell, Mary C. Tieman, Teresa D. Walotka, Patricia M. Waskawic, Mindy Weichmann, Susan Westphal, Vicki Wippich, Christine Wollerman, James A. Zipple and Levern J. Zwirchitz, Plaintiffs-Appellants-Petitioners, James Shipman, Plaintiff, v. National Insurance Services of Wisconsin, Inc. and MidAmerica Administrative & Retirement Solutions, Inc., Defendants-Respondents, Neenah Joint School District and Community Insurance Corporation, Intervenors-Respondents. REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 383 Wis. 2d 600,918 N.W.2d 127 (2018 – unpublished) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: April 30, 2019 March 18, 2019 Circuit Winnebago JUDGE: John A. Jorgensen JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ABRAHAMSON, J. did not participate. ATTORNEYS: For brief the filed plaintiffs-appellants-petitioners, by Charles J. Hertel, Heath G. there was Mynsberge, a and Dempsey Law Firm, LLP, Oshkosh. There was an oral argument by Heath G. Mynsberge. For the defendants-respondents, there was a brief filed by Joseph L. Olson, Mark A. Lotito, and Michael Best & Friedrich LLP, Milwaukee. There was an oral argument by Joseph L. Olson. For the Corporation, intervenor-respondent there was a brief filed Community by Lori M. Insurance Lubinsky, Michael D. Hahn, and Axley Brynelson, LLP, Madison. For the intervenor-respondent Neenah Joint School District, there was a brief filed by Ronald Stadler, Jonnathan Sacks, and Mallery & Zimmerman, s.c., Milwaukee. 2 2019 WI 46 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2016AP493 (L.C. No. 2013CV1149) STATE OF WISCONSIN : IN SUPREME COURT Ann Cattau, Thomas M. Beck, Linda Beckwith, Ardyth Bergstrom, Vicki Christman, Gail W. Cismoski, Kathleen A. Curtis, Janice DeMenter, John Dobbins, Elsie Evenson, Kris Grasley, Gary Haffeman, Kristine Haffeman, Kathy J. Hager, Gail Harrmann, Joann Harrell, Mary Louise Hildebrandt, Lexann Hitchcock, Jo Anne Holden, Karla M. Huston, Susan R. Johnson, Mary K. Jones, Dorothi A. Karisny, Chuck Knoeck, Lawrence H. Krebs, Diane D. Krueger, Helen L. Kurka, Judith J. Kurka Nagel, James Lantz, Jane E. Lantz, Thomas Marzahl, Mary Joy Mayer, Marjorie R. Murphy, Bruce C. Nufer, Anna P. Olson, Sharon O'Reilly, Patricia Ormston, Mark Peerenboom, Sue Peterson, James S. Piepenbrink, Anna Mae Prem, Jane Reimer, Mary J. Resch, Cynthia A. Rieck, Dianne Roth, Lucy Rumpf, Susan M. Schug, David K. Sebora, Suann M. Senso, Karla Sheehan, Sandra L. Smith, Robin L. Snell, Mary C. Tieman, Teresa D. Walotka, Patricia M. Waskawic, Mindy Weichmann, Susan Westphal, Vicki Wippich, Christine Wollerman, James A. Zipple and Levern J. Zwirchitz, Plaintiffs-Appellants-Petitioners, James Shipman, Plaintiff, v. National Insurance Services of Wisconsin, Inc. and MidAmerica Administrative & Retirement Solutions, Inc., FILED APR 30, 2019 Sheila T. Reiff Clerk of Supreme Court Defendants-Respondents, Neenah Joint School District and Community Insurance Corporation, Intervenors-Respondents. REVIEW of a decision of the Court of Appeals. ¶1 PER CURIAM. Affirmed. We review an unpublished decision of the court of appeals1 affirming an order of the circuit court that dismissed plaintiffs' claims.2 Neenah teachers Administrative National & and administrators, Retirement Insurance Plaintiffs, a group of 61 retired Solutions, Services of sued Inc. MidAmerica (MidAmerica) Wisconsin, Inc. and (NIS). MidAmerica and NIS moved to dismiss for failure to state a claim upon which relief may be granted. plead strict breach of fiduciary responsibility duty, The plaintiffs attempted to negligent misrepresentation, and misrepresentation, negligence, all arising from MidAmerica and NIS's alleged mismanagement of their retirement benefits. 1 Cattau v. Nat'l Ins. Servs. of Wis., Inc., No. 2016AP493, unpublished slip op. (Wis. Ct. App. June 13, 2018). 2 The presided. Honorable John A. Jorgenson 2 of Winnebago County No. ¶2 The court of appeals affirmed the 2016AP493 circuit court's dismissal of plaintiffs' claims against MidAmerica and NIS. The court of appeals held that our decision in Data Key Partners v. Permira Advisers N.W.2d 693, Wisconsin, LLC, created and a that 2014 new, under WI 86, 356 heightened this new Wis. 2d 665, pleading standard, 849 standard plaintiffs in had failed to state a claim upon which relief may be granted. ¶3 decision We granted review and unanimously conclude that our in Data Key did not change Wisconsin's pleading standard as previously articulated in Strid v. Converse, 111 Wis. 2d 418, 422-23, 331 N.W.2d 350 (1983). Accordingly, we reverse the decision of the court of appeals in this regard. However, notwithstanding that unanimous conclusion, we are equally divided as to whether the plaintiffs have stated a claim upon which relief may be granted against MidAmerica or NIS based on the Data Key/Strid standard. court of appeals is Therefore, the decision of the affirmed by an equally divided court. Wingra Redi-Mix, Inc. v. Burial Sites Pres. Bd., 2018 WI 54, ¶1, 381 Wis. 2d 601, 912 N.W. 392. ¶4 To explain further, the pleading standard we set out in Data Key is consistent with the pleading standard in Strid, and is grounded requirement statement that of in a the Wis. Stat. complaint claim, § 802.02(1)(a)'s contain identifying "[a] the short (2017-18) and plain transaction or occurrence or series of transactions or occurrences out of which the claim arises and showing that the pleader is entitled to relief." When determining whether a complaint states a claim 3 No. 2016AP493 upon which relief may be granted, courts must "accept as true all facts well-pleaded inferences therefrom." in the complaint and the reasonable Data Key, 356 Wis. 2d 665, ¶19 (citation omitted). "If the facts reveal an apparent right to recover under legal any action." ¶5 theory, they are sufficient as a cause of facts as Strid, 111 Wis. 2d at 423 (citation omitted). While courts must accept all well-pleaded true, courts cannot add facts to a complaint, and do not accept as true legal conclusions that are Data Key, 356 Wis. 2d 665, ¶19. stated in the complaint. For this reason, "a formulaic recitation of the elements of a cause of action" is not enough to state a claim upon which relief may be granted. ¶6 "[T]he sufficiency of a Id., ¶25. complaint depends on substantive law that underlies the claim made because it is the substantive law that drives what facts must be pled." Id., ¶31. If proof of the well-pleaded facts in a complaint would satisfy each element of a cause of action, then the complaint has stated a claim upon which relief may be granted. Id., ¶21; see also Strid, 111 Wis. 2d at 422-23 ("It is the sufficiency of the facts alleged that control the determination of whether a claim for relief is properly plead."). ¶7 The defendants argue that by setting out the pleading standard employed by the United States Supreme Court in Bell Atlantic Corp. Wisconsin's standard. v. Twombly, pleading 550 standard to U.S. a 544 (2007), heightened we changed "plausibility" However, as we explained in Data Key, we interpret the Supreme Court's decision in Twombly as being consistent with 4 No. Strid. Data Key, 356 Wis. 2d 665, ¶30. 2016AP493 Therefore, Data Key controls Wisconsin's pleading standard and it reaffirmed Strid. Id. ¶8 Accordingly, because we unanimously conclude that our decision in standard as Data Key did previously not change articulated in Wisconsin's Strid, we pleading reverse the decision of the court of appeals' interpretation of Data Key. However, notwithstanding our unanimous conclusion, we are equally divided as to whether the plaintiffs have stated a claim upon which relief may be granted against MidAmerica or NIS based on the Data Key/Strid standard. court of appeals is Therefore, the decision of the affirmed by an equally divided court. Wingra Redi-Mix, 381 Wis. 2d 601, ¶1. By the Court.—The decision of the court of appeals is affirmed. ¶9 SHIRLEY S. ABRAHAMSON, J., withdrew from participation before oral argument. 5 No. 2 2016AP493

Primary Holding

The Supreme Court affirmed the court of appeals' decision affirming the circuit court's dismissal of Plaintiffs' claims alleging mismanagement of their retirement benefits, holding that, despite the court of appeals' erroneous holding that Data Key Partners v. Permira Advisers LLC has created a new pleading standard in Wisconsin, Plaintiffs failed to state a claim upon which relief may be granted.

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