Madison Newspapers, Inc. v. Pinkerton's Inc.

545 N.W.2d 843, 200 Wis. 2d 468, 1996 Wisc. App. LEXIS 271, 1996 WL 84602

• Court: Court of Appeals of Wisconsin
• Decided: February 29, 1996
• Docket: 95-0699
• Status: Published

Opinions

EICH, C.J.

Madison Newspapers, Inc. (MNI) appeals from an order for summary judgment dismissing an action in which it asserted claims in both contract and tort against Pinkerton's, Inc., for damage resulting from a fire set by a Pinkerton's employee while performing security services for MNI.

The trial court ruled: (1) given the contractual relationship between the parties, MNI had no independent cause of action for negligence against Pinkerton's; and (2) as a matter of law, Pinkerton's was not liable for the damage to MNI's facilities under the terms of the contract. MNI's appeal from those rulings raises only questions of law, which we consider de novo, owing no deference to the trial court's decision. Green Scapular Crusade, Inc. v. Town of Palmyra, 118 Wis. 2d 135, 138, 345 N.W.2d 523, 525 (Ct. App. 1984).

We conclude that the trial court properly dismissed the negligence claim, but that it erred in holding that MNI had no cause of action against Pinkerton's based on the parties' contract. We therefore affirm in part and reverse in part, remanding the case to the trial court for further proceedings on the contract claim.

The basic facts are not in dispute. MNI, the publisher of Madison's two daily newspapers, contracted with Pinkerton's to provide security services at its facility. Under the contract, which we discuss in more detail below, Pinkerton's agreed to accept liability for "negligen[t], fraudulent or dishonest acts" of its employees in the performance of their duties.

One of the security guards hired by Pinkerton's to work at MNI was Jeff Breunig. According to MNI, after Breunig’s first weekend on the job, they came to suspect him of damaging some computer equipment and stealing a calculator and requested that his supervisors, Everett Isham and David Post, notify MNI of any unusual activities — including fires — occurring during Breunig's shifts.

The following Sunday, a small fire was set in the MNI building at approximately 5:40 a.m. Post and Isham were notified of the incident and came to the building to investigate. They notified the Madison police of the incident but did not immediately notify MNI. According to MNI, Post and Isham kept Breunig on duty that day despite their suspicions that he had been involved in setting the fire. A few hours later, Breunig — who, it turned out, had set the first fire — set a second fire which caused substantial damage to MNI's property.¹

MNI sued, claiming that Pinkerton's had been negligent in providing security services and in supervising and training its personnel and had breached its service contract with MNI. Pinkerton's moved for summary judgment dismissing the action and, as indicated above, the trial court granted the motion.

I. The Negligence Claim

MNI argues that the facts of the case give rise to a separate tort cause of action against Pinkerton's in addition to its claim for breach or misperformance of the parties' contract. In McDonald v. Century 21 Real Estate Corp., 132 Wis. 2d 1, 390 N.W.2d 68 (Ct. App. 1986), we recognized that, under the common law, causes of action for tort and contract "have historically had different purposes and protected different interests," and we emphasized that difference by noting that " 'torts consist of the breach of duties fixed and imposed upon the parties by the law itself, without regard to their consent to assume them....'" Id. at 7, 390 N.W.2d at 70, 71 (quoting W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 1, at 4 (5th ed. 1984)) (emphasis added).²

Thus, where the alleged tort may be seen as related to a contract between the parties, "[i]n order for ... a cause of action in tort to exist, a duty must exist independently of the performance of the contract." Dvorak v. Pluswood Wisconsin, Inc., 121 Wis. 2d 218, 220, 358 N.W.2d 544, 545 (Ct. App. 1984) (emphasis added). Under this test, "the existence of a contract is ignored when determining whether [the] alleged misconduct is actionable in tort." Id.

In McDonald, the plaintiffs entered into a residential listing contract with a real estate agent. The contract provided that the agent would prequalify potential buyers of their house, and when the agent failed to do so with respect to a buyer who ultimately reneged on his offer, the plaintiffs sued the agent in tort. We held that the negligent performance of a duty created by contract — the duty to prequalify — cannot, without more, create a separate cause of action for negligence. McDonald, 132 Wis. 2d at 9, 390 N.W.2d at 71. We said:

"Ordinarily, a breach of contract is not a tort, but a contract may create the state of things which furnishes the occasion of a tort." "The 'state of things' which arises out of a contract furnishes the occasion for the tort, but not the underlying duty for the tort. . . . [T]here must be a duty existing independently of the performance of the contract for a cause of action in tort to exist."

Id. at 6 n.3, 390 N.W.2d at 70 (emphasis added; quoted sources omitted; citations omitted). We went on to hold that because the real estate agent had no duty to pre-qualify potential buyers existing independently of the contract between the parties, the plaintiffs did not have a separate cause of action in tort. Id. at 8-9, 390 N.W.2d at 71. See also Nelson v. Motor Tech, Inc., 158 Wis. 2d 647, 653, 462 N.W.2d 903, 906 (Ct. App. 1990) (in order to proceed in a tort action when the parties' relationship is defined by contract, there must be a common-law duty independent from any duties created by the contract).

This case presents a similar situation. It is undisputed that Pinkerton's relationship with MNI was wholly the result of its contract to provide security services to the MNI building. Indeed, the only reason Pinkerton's employees were on MNI's property in the first place was because of the contract, and whatever tasks and obligations Pinkerton's undertook in this regard originated not in some independently existing common-law duty but in the terms and conditions of the document.

MNI disagrees. Citing Colton v. Foulkes, 259 Wis. 142, 47 N.W.2d 901 (1951), it argues that Pinkerton's had an independent common-law duty to "use reasonable care in providing professional security guard services .. .." We think Colton is inapplicable. In that case, the supreme court allowed a tort action to proceed against a defendant who allegedly negligently repaired the plaintiffs porch, on the basis that there was a general duty of due care in repairing the porch to avoid personal injury — a duty that existed independent of the parties' contract. Id. at 146-47, 47 N.W.2d at 903-04. In a later case, Landwehr v. Citizens Trust Co., 110 Wis. 2d 716, 723, 329 N.W.2d 411, 414 (1983), the court emphasized that, to be actionable, the tort claim must exist at common law independent of the parties' contract, and pointed out that, in Colton, the plaintiff had a negligence cause of action "[e]ven without a contract, . .. since the defendant... had a general common law duty to use reasonable care in repairing the porch."

In a more recent case, the court again cautioned that Colton should not be read as weakening the proposition that, for there to be a cause of action in tort between parties to a contract, the plaintiff must show the existence of a duty " 'existing independently of the performance of the contract....'" Greenberg v. Stewart Title Guar. Co., 171 Wis. 2d 485, 495, 492 N.W.2d 147, 152 (1992) (quoting Landwehr, 110 Wis. 2d at 723, 329 N.W.2d at 414). The Greenberg court stated:

[W]e later explained the limits of Colton in Landwehr. In Landwehr, we explained that our language in Colton was meant to indicate that the " 'state of things' which arises out of a contract furnishes the occasion for the tort, but not the underlying duty for the tort." We concluded that "there must be a duty existing independently of the performance of the contract for a cause of action in tort to exist." We reaffirm that holding today.

Id. at 495, 492 N.W.2d at 152 (citations omitted; quoted sources omitted).

Finally, in a three-sentence argument without elaboration or citation to authority, MNI generally suggests that such an independent duty exists in this case because Pinkerton's advertising materials described it as a large, "sophisticated" and well-supervised company. At another point in its brief, again without citation to authority, MNI suggests that Pinkerton's "had an independent, common law duty to use reasonable care in providing professional security guard services to Madison Newspapers, including monitoring and supervising Bruenig [sic]." We are not persuaded. See State v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d 633, 642 (Ct. App. 1992) (where legal authority is not cited and arguments "are not developed themes reflecting . . . legal reasoning" but are supported by only general statements, appellate court may decline to review them).

For the foregoing reasons, we are satisfied that the trial court did not err in dismissing MNI's tort claim.

II. The Contract Claim

MNI next argues that the trial court should not have dismissed its claim that Pinkerton's is liable for the fire damage under the terms of the parties' contract in which Pinkerton's accepts responsibility for dishonest or negligent acts committed by its employees in the course of their employment.³

The trial court, noting that these provisions reflect well-recognized principles of respondeat superior, under which an employer is liable for torts committed by employees while acting within the scope of their employment, Olson v. Connerly, 156 Wis. 2d 488, 498, 457 N.W.2d 479, 483 (1990), concluded that under the language of the contract Pinkerton's was not responsible for Breunig's criminal acts because they were plainly beyond the scope of his employment.

MNI concedes that Breunig's actions were outside the scope of his duties. The acts for which it seeks redress, however, are not Breunig's; rather, it maintains that Pinkerton's supervisory employees, Post and Isham, were negligent in failing to properly supervise Breunig and in failing to take appropriate steps to prevent the second fire, once they learned of the first fire, and that their negligence renders Pinkerton's liable under the terms of the parties' contract.⁴

Pinkerton's does not suggest that the language of the contract making it responsible for the negligent or dishonest acts of its employees in the performance of their duties would not apply to supervisory employees such as Post and Isham. Rather, it argues from the depositions and other proofs put forth by the parties on the summary judgment motion that Pinkerton's, through its agents Post and Isham, was not negligent.

We have often said that questions of negligence are rarely susceptible to resolution on motions for summary judgment. Wagner v. Dissing, 141 Wis. 2d 931, 946, 416 N.W.2d 655, 661 (Ct. App. 1987); State Bank of La Crosse v. Elsen, 128 Wis. 2d 508, 517, 383 N.W.2d 916, 920 (Ct. App. 1986). This is so because such questions almost invariably involve conflicting evidence and we do not decide issues of fact in summary judgment proceedings. Elsen, 128 Wis. 2d at 511, 383 N.W.2d at 917. The process is not a " 'short cut to avoid a trial'indeed, the methodology was developed to prevent trial by affidavit or deposition. Id. at 511, 383 N.W.2d at 917-18 (quoted source omitted). Our role on appeal from a summary judgment is limited to determining whether a factual issue exists, resolving any doubts in that regard against the party moving for summary judgment. Id. at 512, 383 N.W.2d at 918. And if the material presented on the motion is subject to conflicting factual interpretations or inferences, or if reasonable people might differ as to its significance, summary judgment should be denied and the matter remanded for trial. Kara B. v. Dane County, 198 Wis. 2d 24, 49, 542 N.W.2d 777, 788 (Ct. App. 1995), review granted, 199 Wis. 2d xxxv, 546 N.W.2d 468 (Jan. 16, 1996); Elsen, 128 Wis. 2d at 512, 383 N.W.2d at 918.

Here, the parties dispute several issues of material fact. MNI asserts that although Post and Isham were informed that Breunig might have been involved in the earlier theft and damage to MNI property and were requested to immediately report anything unusual occurring during his shifts — and although they in fact suspected Breunig of setting the first fire — they not only allowed him to remain on MNI premises but asked him to remain past his assigned work time. Pinkerton's, citing deposition testimony, maintains that Post did not consider Breunig a suspect to a greater degree than any other employee present at the building that day. Pinkerton's also asserts that Post and Isham fulfilled all their obligations to MNI, pointing again to depositions suggesting that they had never been directed to contact MNI immediately about suspicious occurrences on Breunig's shift. We see this as precisely the type of case where conflicting facts and factual assertions render summary judgment inappropriate with respect to these issues.

For these reasons, we reverse the order insofar as it granted Pinkerton's motion for summary judgment dismissing MNI's contract claims, and we remand to the trial court for further proceedings with respect to those claims.

By the Court — Order affirmed in part; reversed in part and cause remanded for further proceedings consistent with this opinion.

1 Breunig later pled guilty to arson and damage to property and was sentenced to one year in prison.

2 We stated:

Put another way: "Tort obligations are in general obligations that are imposed by law on policy considerations to avoid some kind of loss to others. They are obligations imposed apart from and independent of promises made and therefore apart from any manifested intention of parties to a contract or other bargaining transaction. Therefore, if the alleged obligation to do or not to do something that was breached could not have existed but for a manifested intent, then contract law should be the only theory upon which liability would be imposed."

McDonald v. Century 21 Real Estate Corp., 132 Wis. 2d 1, 8 n.5, 390 N.W.2d 68, 71 (Ct. App. 1986) (quoting W. PAGE Keeton et al., Prosser and Keeton on the Law of Torts § 92, at 656 (5th ed. 1984)) (emphasis in McDonald omitted).

3 Specifically, the contract states:

6. Pinkerton's does not insure against theft, loss or damage to equipment, furniture, machines, fixtures or other property real or personal, rented, leased or otherwise possessed by the client. Therefore it cannot assume any liability for theft, loss or damage other than that resulting from the sole negligence, fraudulent or dishonest acts of its employees.

8. Pinkerton's accepts liability for any and all acts of negligence on the part of any of its employees in the performance of his or her duties.

4 Pinkerton's argues that we should not consider the argument because MNI raises it for the first time on appeal. See Evjen v. Evjen, 171 Wis. 2d 677, 688, 492 N.W.2d 361, 365 (Ct. App. 1992) (appellate court will not as a rule consider arguments raised for the first time on appeal). Our review of the record, however, establishes to our satisfaction that MNI raised this issue in both its complaint and its brief opposing the motion for summary judgment.

Even so, the waiver rule is "[one] of judicial administration" which we may, in the proper exercise of our discretion, choose not to employ in a given case. DOR v. Mark, 168 Wis. 2d 288, 293 n.3, 483 N.W.2d 302, 304 (Ct. App. 1992). In this appeal we believe it is appropriate to consider the issue because MNI argued the point on the summary judgment motion — even though the trial court did not separately consider it — and because we do not finally decide the issue but remand for trial on MNI's claim.