Opinion
No. 76-219.
Submitted on briefs April 6, 1978. —
Decided May 2, 1978.
APPEAL from an order of the circuit court for Milwaukee county: ROBERT M. CURLEY, Circuit Judge. Vacated and remanded for further proceedings.
For the appellants the cause was submitted on the briefs of Lawrence G. Wickert, Harold H. Fuhrman, John P. Roemer, and Wickert Fuhrman of Milwaukee.
For respondent Michels Pipeline Construction, Inc., the cause was submitted on the brief of Law Office C. Donald Straub of Milwaukee.
A joint brief was submitted by Ewald L. Moerke, Jr., Robert Arthur Melin, and Schroeder, Gedlen, Riester Moerke of Milwaukee, for Metropolitan Sewerage Commission of the County of Milwaukee, and Metropolitan Sewerage District of the County of Milwaukee; and by James B. Brennan, city attorney, and Richard F. Maruszewski, assistant city attorney, for Sewerage Commission of the City of Milwaukee.
This is an appeal by twenty named plaintiffs (hereinafter "named plaintiffs"), from a portion of an order which sustained the defendants' demurrers to the plaintiffs' amended complaint for the sole reason that the causes of action set forth therein had not been separately stated.
This action was originally commenced as a class action in July, 1973. The complaint identified twenty plaintiffs, and further alleged that the action was brought on behalf of about 300 similarly situated landowners and their spouses. The pleading named as defendants Michels Pipeline Construction, Inc., Milwaukee County Metropolitan Sewerage District, Milwaukee County Metropolitan Sewerage Commission, Sewerage Commission for the City of Milwaukee and Milwaukee County. The complaint set forth three causes of action in which it was alleged that the defendant construction company's dewatering activities in the course of installing a sewer in accordance with a contract with, and otherwise under the authorization of the other defendants, caused damage to the property of the surrounding landowners. This complaint sought an injunction to halt construction, a declaration that the contract was null and void, and damages in the sum of five million dollars. Defendants all filed answers.
Shortly after the commencement of this action, a related action was brought by the State of Wisconsin to restrain the dewatering activities relating to this project as a public nuisance. From an order sustaining the defendants' demurrer to the state's complaint, an appeal was taken, and in State v. Michels Pipeline Construction, Inc., 63 Wis.2d 278, 217 N.W.2d 339, 219 N.W.2d 308 (1974), this court adopted the rule of liability arising from the use of ground water set forth in Restatement (Second) of Torts, sec. 858A (Tentative Draft No. 17, April 26, 1971), and reversed.
Subsequently, the plaintiffs petitioned the trial court for permission to intervene over one hundred additional named plaintiffs, and for leave to amend the complaint. The trial court denied the petition to intervene, but granted leave to amend the complaint as to the original named plaintiffs.
The amended complaint, with only a few exceptions and modifications, merely incorporated by reference the allegations of the original complaint. All of the defendants demurred to the amended complaint: the County District, County Commission and County demurred to the complaint on the grounds that several causes of action had been improperly united and that the complaint failed to state a cause of action; the City Commission and Michels challenged the complaint solely on the ground that several causes of action had been improperly united. Michels also brought a motion to strike those portions of the amended complaint relating to those who had sought to intervene as named plaintiffs.
In a written decision, dated April 5, 1975, the trial court concluded:
"The plaintiffs have failed to state a cause of action against the defendant Milwaukee County, and thus, the County's demurrer on that ground is sustained, and the plaintiffs' claim against the County is dismissed with costs.
"Sufficient facts to constitute a cause of action against the County District and County Commission have been stated by the plaintiffs, and the demurrer on that ground on those defendants is overruled.
"The demurrer of all the defendants on the ground that several causes of action have been improperly joined is sustained solely for the reason that the plaintiffs' causes of action have not been separately stated.
"The motion to strike by the defendant Michels is denied.
"In light of all of the above, the court grants leave to the plaintiffs to amend their complaint in accordance with the decision of the court, and they are, therefore, allowed twenty (20) days to replead."
On April 27, 1975, the plaintiffs moved for a rehearing on the question of whether the plaintiffs' cause of action could be maintained as a class action. The County District and County Commission also brought a motion for rehearing on the question of whether they could be held liable under the terms of the contract for any tortious conduct on the part of Michels. Both motions were denied.
In July, 1976 the trial court entered an order reflecting its decisions as to the demurrers and motion to strike, and the subsequent motions for rehearing. The plaintiffs thereupon filed a notice of appeal which stated they were appealing that portion of the trial court's July, 1976 order which provided:
"1. That the demurrers of each of the defendants to the Amended Complaint on the ground that several causes of action have been improperly united be sustained, solely for the reason that the plaintiffs' causes of action have not been separately stated."
The City Commission, the County Commission and District, and Michels have all filed notices of review requesting this court to review the trial court's decision that the separate claims of the named plaintiffs could be properly joined.
Two issues are presented on appeal:
1. Did the trial court err in holding that the action was not a proper class action?
2. If the answer is no, then did the trial court err in concluding that the causes of action of the named plaintiffs were properly joined?
Class Actions
The plaintiffs contend that this action was properly commenced as a class action, and that because the requirements of secs. 263.04 and 260.10, Stats. (1973), are not applicable to class actions properly brought under 260.12(1973), Schlosser v. Allis-Chalmers Corp., 65 Wis.2d 153, 160-68, 222 N.W.2d 156 (1974), the trial court erred when it sustained the defendants' demurrers "solely for the reason that the plaintiffs' causes of action have not been separately stated."
The plaintiffs apparently assume there is no issue as to whether this action is properly maintained as a class action. This assumption is based on language contained in State v. Michels Pipeline Construction, Inc., supra at 303b, where this court stated that the newly adopted Restatement (Second) of Torts, test for liability arising from the use of ground water would apply prospectively only, "except as to those individually named plaintiffs appearing as amici curiae, including others in the class in the related case of Dale Nolte, et al. v. Michels Pipeline Construction, Inc., . . . whom they alleged to represent. . . ." Contrary to what the plaintiffs believe, this language does not settle the question of whether the instant suit is an appropriate class action. Rather, it only recognized that the instant action should benefit from the rule of liability adopted in that case.
When this action was commenced, sec. 260.12, Stats. (1973), provided:
"260.12 Parties united in interest to be joined; class actions; alternative joinder. Of the parties to the action those who are united in interest must be joined as plaintiffs or defendants; but if the consent of any one who should be joined as plaintiff cannot be obtained he may be made a defendant, the reason thereof being stated in the complaint; and when the question is one of a common of general interest of many persons or when the parties are very numerous and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole. And when more than one person makes a separate claim for damage against the same person or persons based upon the same alleged tortious conduct, they may unite in prosecuting their claims in one action." (Emphasis supplied).
Three criteria must be satisfied in order for an action to be maintained under this section:
"(1) The named parties `must have a right or interest in common with the persons represented;' (2) the named parties `must fairly represent the interest or right involved so that the issue may be fairly and honestly tried;' and (3) it must be `impracticable to bring all interested persons before the court.'" Schlosser v. Allis-Chambers Corp., supra at 169.
Only these requirements, and not those of the general joinder statutes, apply to actions properly maintained as class actions. Schlosser v. Allis-Chalmers Corp., supra at 161.
In Hicks v. Milwaukee County, 71 Wis.2d 401, 406, 238 N.W.2d 509 (1976), this court noted that "[i]f, under the facts of the case, a simplification of the law suit will result and a multiplicity of litigation can be avoided, an action may be maintained on behalf of a class where each member of the class has a separate cause of action for money damages." The determination of whether the benefits to be derived from such a procedure outweigh the inherent difficulties so as to justify maintaining a suit as a class action is one addressed to the discretion of the court, Lozoff v. Kaisershot, 11 Wis.2d 485, 488-89, 105 N.W.2d 783 (1960); Pipkorn v. Brown Deer, 9 Wis.2d 571, 578-79, 101 N.W.2d 623 (1960).
"`[T]he court must determine whether the advantages of disposing of the entire controversy in one proceeding are outweighed by the difficulties of combining divergent issues and persons. It is a question of the balance of convenience whether the court will settle all the issues in one suit; or will settle only the common question in one suit and then allow the independent questions to proceed in separate equity suits; or not settle the controversy at all in a single suit.'" Schlosser v. Allis-Chalmers Corp., supra at 172, quoting Z. Chaffee, Some Problems in Equity, 193 (1950).
In the instant case, the trial court concluded that the plaintiffs' suit did not satisfy the requirement that the named parties have a right or interest in common with the class members. Essentially, the court concluded that the issues common to both the named plaintiffs and the class members were outweighed by the issues particular to the individual plaintiffs and class members. On this appeal, then, the question is whether the trial court abused its discretion in so concluding.
The amended complaint rests on the theory of liability for the negligent withdrawal of groundwater recently recognized by the court in State v. Michels Pipeline Construction, supra, a nuisance action commenced by the state against these same defendants and arising out of the same facts. In that case, this court adopted the rule of sec. 858A of the Restatement (Second) of Torts, which states, in pertinent part:
"A possessor of land or his grantee who withdraws groundwater from the land and uses it for a beneficial purpose is not subject to liability for interference with the use of water by another, unless
"(a) the withdrawal of water causes unreasonable harm through lowering the water table or reducing artesian pressure, . . ."
The trial court initially determined that the amended complaint set forth sufficient facts to state a cause of action based on this theory against the defendants, the County Commission and District, the City Commission and Michels; but the court sustained the County's demurrer and dismissed the action as to it. These conclusions are not contested on this appeal.
However, the trial court reasoned that even though the named plaintiffs had in common with the class members an interest in those issues concerning the defendants' liability for the dewatering, the issues concerning causation and the amount of damage sustained by them were substantial and particular to each. Unlike the situation presented in Schlosser, the trial court concluded, the determination of the amount of damages to which each class member would be entitled could not be accomplished merely by reference to business records in the defendants' possession:
"In this case, . . . it is not manifest that the defendants' allegedly unlawful conduct affected each member of the class in the same way. One member may have sustained a cracked driveway, while another may have been damaged by the drying up of a well. In addition, the determination of damages will be distinct and possibly difficult as to each member, and thus, this case is against distinguishable from Schlosser, supra, where the individual damages could be easily determined by reference to insurance records."
In this respect, the difficulties which would attend the determination of damages in this case — including, perhaps, the calling of the class members themselves to testify as to the damage sustained by them — distinguishes this case from previous cases in which a class action for money damages has been sustained. See, e.g., Mussallem v. Diners' Club, Inc., 69 Wis.2d 437, 230 N.W.2d 717 (1975) (action to recover usurious interest exactions); Schlosser v. Allis-Chalmers Corp., supra, (action to recover damages arising out of defendant's unilateral modification of a group life insurance program for retired employees); Peters v. International Harvester Co., 248 Wis. 451, 22 N.W.2d 518 (1946) (action to recover damages resulting from illegal wage deductions). In those cases, "some allegedly unlawful act or series of identical acts of the employer [or creditor] injured each member of the class in the same way, but produced a different amount of damages." Schlosser v. Allis-Chalmers Corp., supra at 173. (Emphasis supplied). Here, the complaint clearly indicates that the various surrounding landowners were injured in various different ways.
In addition, there is an aspect of this action which apparently was not considered by the trial court but which bears on the question of whether this is an appropriate class action. Under the rule adopted in State v. Michels Pipeline Construction, supra, a landowner will not be liable for interference with another's use of water unless unreasonable harm is caused by the actor's withdrawal of groundwater. Thus, this theory of liability is inherently antagonistic to the class action criteria discussed above: not only would the question of damages be particularized as to each individual class member, but the question of the defendants' liability for the harm would likewise be particularized. Massive cracks appearing in the basement walls of one of the class members might constitute unreasonable harm under the rule, whereas the appearance of a minor crack in the driveway of another might not. While we do not hold that under no circumstances may a class action be maintained under this theory of liability, we do note that this theory may pose substantial difficulties upon which a trial court might determine that a class action would be inappropriate.
Thus, we conclude that the trial court did not abuse its discretion in determining that this was not an appropriate class action.
Party Joinder
The defendants, by their notices of review, request this court to determine whether the trial court erred in concluding that the named plaintiffs' causes of action were properly joined.
When this action was commenced, sec. 260.10, Stats. (1973) provided that, "[a]ll persons having an interest in the subject of the action . . . may be joined as plaintiffs." Furthermore, sec. 260.12, Stats. (1973), provided in relative part:
"[W]hen more than one person makes a separate claim for damage against the same person or persons based upon the same alleged tortious conduct, they may unite in prosecuting their claims in one action."
The defendants argue that there is no one "subject of the action" in this case common to the individual plaintiffs so as to permit joinder under these sections: "[The plaintiffs] do not seek to divide a common fund or determine ownership rights to property in which they all claim an interest. Nor do they have an interest `in obtaining the relief demanded,' since they each seek a separate damages recovery." Schlosser v. Allis-Chalmers Corp., supra at 159-60, citing Van Dien v. Riopelle, 40 Wis.2d 719, 162 N.W.2d 615 (1968); and Hartwig v. Bitter, 29 Wis.2d 653, 139 N.W.2d 644 (1966).
In Hartwig v. Bitter, supra, this court held that two plaintiffs who had allegedly been damaged by two separate acts of misrepresentation more than two years apart by the same defendant could not join their claims under secs. 260.10 and 260.12, Stats. In Van Dien v. Riopelle, supra, this court held that three plaintiffs who had been joined together in an equitable action for an accounting met the requirements of sec. 260.10, Stats., but then went on to say:
"This reasoning, of course, does not apply to an automobile accident where several persons are involved because in such a case the recovery of each individually injured person has no relationship and does not depend upon the amount of the recovery of the other. Such cases give rise to separate causes of action which often may be tried together for purposes of trial but may not be joined in one suit." Van Dien v. Riopelle, supra at 723.
More recent is the case of Ewing v. General Motors Corp., 70 Wis.2d 962, 236 N.W.2d 200 (1975). There, three passengers of an automobile which was involved in an accident brought a single lawsuit against the manufacturer and two other corporations which had done repair work on the automobile. Against each defendant, these plaintiffs sought damages on the theories of strict liability, negligence and breach of warranty. Joining them in this lawsuit was the husband and father of the three. He sued the same defendants under the same theories, claiming damages due to medical expenses, loss of society and companionship and, as to his wife, loss of consortium. He also sued a fourth defendant: the driver of the automobile. A demurrer to the complaint on the grounds of improper joinder of causes of action was overruled by the trial court, and on appeal this court explained the criteria for party joinder under secs. 260.10 and 260.12, Stats. (1973) as follows:
"First of all, while it is true that in such a case the amounts of recovery of individually injured plaintiffs are dissimilar, it is also true that their rights to recover anything at all are closely related since they depend upon proof that someone was negligent in the common accident which caused their injuries. Thus it follows that, because there are common questions of fact arising out of the same accident, each individually injured plaintiff has an `interest' in the subject matter of the other plaintiff's action, and so they should be able to join together." Ewing v. General Motors Corp., supra at 970.
In Ewing, this court dismissed the above quoted language from Van Dien as "not an accurate statement of the law," Ewing v. General Motors Corp., supra at 970, and affirmed the trial court order.
The following year, this court used a similar analysis to conclude that two plaintiffs seeking to recover punitive as well as compensatory damages were properly joined in a single lawsuit. In Madison v. Hyland, Hall Co., 73 Wis.2d 364, 243 N.W.2d 422 (1976), the City of Madison and Dane County commenced a civil anti-trust action against several defendants who, it was alleged, had submitted collusive bids on mechanical work during an eleven year period. Going first to the question of improper joinder of several causes of action under sec. 263.04, Stats. (1973), the court held that the complaint stated but one cause of action:
"[T]he complaint reveals but one grouping of facts which fall into a single unit, that is, one containing conspiracy among the defendants made with particular conspirators and contracts made pursuant to the alleged conspiracy. There is but one subject to the controversy — the conspiracy and the contracts growing out of it — and one primary right asserted — the right to be free from the collusive bids on the various contracts. . . . The same facts constitute the identical cause of action for which the law gives separate remedies — treble damages and the recovery of contract payments." Madison v. Hyland, Hall Co., supra at 379-80.
The court also held that the plaintiffs were properly joined under secs. 260.10 and 260.12, Stats. (1973): "[P]laintiffs rest their claim for treble damages and recovery of contract payments on the allegation that each of the defendants participated in the same tortious conduct. Ewing, supra, expressly permitted the recovery of dissimilar claims because there were common questions of fact that arose out of the same incident. . . ." Madison v. Hyland, Hall Co., supra at 381.
In the instant case the plaintiffs allege that they were harmed by the dewatering activities of the defendant Michels in the course of constructing a sewer pursuant to a municipal contract. The plaintiffs alleged that, beginning in September, 1972, Michels removed subterranean water from a well in the area at an approximate rate of 5,500 gallons per minute, and continued dewatering until the commencement of this action at the rate of 3,500 gallons per minute. The complaint also alleges that the municipalities, under various theories, are liable for the tortious conduct of Michels, the validity of which has not been challenged on this appeal. We conclude, therefore, that this course of activity, together with the common interest in determining the liability of the municipal defendants for the acts of Michels, constitutes a sufficiently common interest in the subject matter of this action so as to permit joinder in accordance with Ewing v. General Motors Corp., supra, and Madison v. Hyland, Hall Co., supra.
We think there remains one last aspect of this case for consideration, that is, the grounds on which the trial court did sustain the demurrer.
In its order, the trial court sustained the defendants' demurrers "solely for the reason that the plaintiffs' causes of action have not been separately stated." The requirement that the causes of action must be separately stated is found in sec. 263.04, Stats. (1973). When, as is the case in this instance, the only defect of the complaint is its failure to separately state the causes of action of the various plaintiffs, the defect has been viewed as one of lack of detail or precision, the remedy for which is by motion to make more definite and certain and not by demurrer. See, Madison v. Hyland, Hall Co., supra at 384; A C Storage Co. v. Madison Moving Wrecking Corp., 38 Wis.2d 15, 22, 155 N.W.2d 567 (1968); Caygill v. Ipsen, 27 Wis.2d 578, 584, 135 N.W.2d 284 (1965).
The trial court's order sustaining the demurrer on the grounds that the plaintiffs did not separately state their causes of action probably accomplishes the same result as would a more appropriate order sustaining a motion to make more definite and certain: the plaintiffs were given 40 days to plead over. However, it must be noted that because it sustained the demurrer for the above stated reason, the trial court concluded that it was not necessary to consider Michels' motion to strike certain portions of the complaint referring to the parties who attempted to intervene in this action, and to references to the class. Thus, we conclude that it is more appropriate in this case to vacate the trial court's order of July 26, 1976 and remand the cause with directions to enter an order directing plaintiffs to make their complaint more definite and certain. This procedure will allow the trial court, on Michels' motion, to strike those portions of the complaint found to be irrelevant by this decision.
By the Court. — Order vacated and cause remanded for further proceedings consistent with this opinion.