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State ex rel. Flynn v. Kemper Center, Inc.

Court of Appeals of Wisconsin, District II

January 29, 2019

State of Wisconsin ex rel. Annette Flynn, Plaintiff-Respondent,
Kemper Center, Inc. and Gary Vaillancourt, Defendants-Appellants.

          APPEAL from a judgment of the circuit court for Kenosha County No. 2017CF141: CHAD G. KERKMAN, Judge.

          Before Stark, P.J., Hruz and Seidl, JJ.

          HRUZ, J.

         ¶1 Kemper Center, Inc. and Gary Vaillancourt appeal a grant of summary judgment to Annette Flynn, proceeding on behalf of the State of Wisconsin, in Flynn's action to enforce Wisconsin's Public Records Law, Wis. S . §§ 19.31-.39 (2015-16). The sole issue in this case is whether Kemper TAT [1] Center, Inc. is a "quasi-governmental corporation" and therefore an "authority" having custody of a record within the meaning of § 19.32(1). Based upon the undisputed facts, we conclude as a matter of law that Kemper Center, Inc. is not a quasi-governmental corporation subject to the Public Records Law. Accordingly, we reverse the circuit court's grant of summary judgment and remand with directions to dismiss the complaint.


         ¶2 Kemper Center, Inc. was incorporated on July 2, 1975, as a Wisconsin nonstock corporation. The corporation was formed by alumnae of Kemper Hall, a private all-girls boarding school in Kenosha that had closed. According to Kemper Center, Inc.'s articles of incorporation, its stated purpose was to raise funds to allow the City of Kenosha or Kenosha County to purchase and maintain the former Kemper Hall property. By facilitating the property's preservation, Kemper Center, Inc. sought to encourage the property's "use as a park, recreational area, cultural center or other such use open to, and for the benefit and enjoyment of, the general public."[2]

         ¶3 A proposal for the City of Kenosha to purchase Kemper Hall was defeated at referendum. Kemper Center, Inc. fared better with Kenosha County, which purchased Kemper Hall in 1977. No County funds were used for the purchase. Instead, the $225, 000 purchase price was paid with $117, 789 in funds raised by Kemper Center, Inc. The remainder of the purchase price came from two grants to the County. The Kemper Hall property was conveyed directly to the County by the religious corporation that had owned and operated the school. To induce the County to purchase Kemper Hall, a nearby landowner, Janet Anderson, also agreed to donate her home and adjoining five acres to the County. The property currently consists of over seventeen acres and contains a number of valuable, historic buildings, including the Anderson Arts Center. We will hereafter refer to the entire physical park premises as Kemper Park.

         ¶4 On the same day the County acquired Kemper Park, it executed a lease agreement with Kemper Center, Inc.[3] The lease was for a term of twenty-five years to expire on August 24, 2002, with a review of the lease occurring every five years. In 1998, the County and Kemper Center, Inc. renewed the lease for an additional twenty-five years at the urging of Kemper Center, Inc.'s then-president, who advised the County he was having difficulty securing sponsor funds for a conference center without a long-term lease in place.

         ¶5 Under the lease, Kemper Center, Inc. is to pay the County one dollar annually in rent. In exchange, Kemper Center, Inc. has the right to use Kemper Park as a "special purpose area" dedicated to historic preservation, educational and cultural programs, and individual and group recreational activities. The lease permits Kemper Center, Inc. to retain all fees, rental income, and other revenues generated at Kemper Park, but it also makes Kemper Center, Inc. responsible for "operational and maintenance costs." Other relevant provisions of the lease will be discussed below.

         ¶6 In 1976, the Internal Revenue Service designated Kemper Center, Inc. a tax-exempt charitable and educational organization. Kemper Park was officially designated as a County park on November 3, 1977. The Kemper Hall building was added to the National Register of Historic Places in 1976 and to the Wisconsin Register of Historic Places in 1989. In March 1982, Kemper Center, Inc. and the Kenosha County Park Commission entered into a management agreement that provided Kemper Center, Inc. with monthly funding for the maintenance of Kemper Park, including expenses for employee salaries, utilities and office expenses. The management agreement was in effect between January and December 1982 and has not been renewed, although the County continues to make annual grants to Kemper Center, Inc. These grants have totaled nearly $3 million since 1978.

         ¶7 In November 2016, Kenosha County resident Annette Flynn submitted to Kemper Center, Inc.'s president, Gary Vaillancourt, a request for disclosures under the Public Records Law. Flynn's request identified records in a substantial number of categories, including documents regarding Kemper Center, Inc.'s formation and tax-exempt status, employee work records, meeting minutes, records regarding certain events held at Kemper Park in 2016, and all documents pertaining to "the status of Victoria's Catering as [Kemper Center, Inc.'s] 'preferred caterer' or 'in-house preferred caterer.'"[4]

         ¶8 Kemper Center, Inc. denied Flynn's records request, asserting that it was not a "quasi-governmental corporation" subject to the Public Records Law. See Wis. Stat. § 19.32(1). Flynn then commenced the present action, alleging that Kemper Center, Inc. was subject to the Public Records Law, was the custodian of the records that she had requested, and had violated the law by refusing to furnish those records. Flynn requested declaratory and mandamus relief, as well as damages, costs and attorney fees.

         ¶9 The parties filed cross-motions for summary judgment and supporting affidavits. Following a hearing, the circuit court granted summary judgment for Flynn, concluding that there was no genuine issue of material fact and declaring Kemper Center, Inc. is a quasi-governmental corporation subject to the Public Records Law.[5] Kemper Center, Inc. now appeals. Additional relevant facts are included below.


         ¶10 We review a grant of summary judgment de novo. Tews v. NHI, LLC, 2010 WI 137, ¶40, 330 Wis.2d 389, 793 N.W.2d 860. The summary judgment methodology is well established. Id., ¶41. We first examine the pleadings to determine whether claims have been stated. Id. If so, we examine the moving party's submissions to determine whether it has made a prima facie case for summary judgment. Id. If a prima facie case for summary judgment exists, we examine the opposing party's affidavits and other proof to determine whether summary judgment is appropriate. Id.

         ¶11 Summary judgment must be granted when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Wis.Stat. § 802.08(2). "The purpose of the summary judgment procedure is to avoid trials when there is nothing to try." Tews, 330 Wis.2d 389, ¶42. In reviewing the parties' submissions, we draw all reasonable inferences in the light most favorable to the party against which summary judgment was granted. See Pum v. Wisconsin Physicians Serv. Ins. Corp., 2007 WI.App. 10, ¶6, 298 Wis.2d 497, 727 N.W.2d 346 (2006). Whether an inference is reasonable and whether more than one inference may be drawn are questions of law. Id.

         ¶12 The sole issue in this appeal is whether Kemper Center, Inc. is a "quasi-governmental corporation" within the meaning of the Public Records Law. The Public Records Law's purpose is to provide citizens with the "greatest possible information regarding the affairs of government and the official acts of those officers and employees who represent them." Wis.Stat. § 19.31. The law applies to "authorities" having custody of a record, which includes a "quasi-governmental corporation." Wis.Stat. § 19.32(1).

         ¶13 Determining whether Kemper Center, Inc. is a "quasi-governmental corporation," and therefore an "authority" under the Public Records Law, is a matter of statutory interpretation. See Wisconsin Prof'l Police Ass'n v. Wisconsin Ctys. Ass'n, 2014 WI.App. 106, ¶3, 357 Wis.2d 687, 855 N.W.2d 715. Statutory interpretation is a question of law that we review de novo. Id. We give statutory language its common, ordinary and accepted meaning. State ex rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58, ¶45, 271 Wis.2d 633, 681 N.W.2d 110. If the meaning of a statute is plain, we ordinarily stop the inquiry. Id.

         ¶14 The term "quasi-governmental corporation" is not defined in the Public Records Law. However, in 2008, our supreme court "set[] forth the circumstances when an entity so resembles a governmental corporation, that it is treated as a quasi-governmental corporation for purposes of open meetings and public records laws." State v. Beaver Dam Area Dev. Corp., 2008 WI 90, ¶7, 312 Wis.2d 84, 752 N.W.2d 295');">752 N.W.2d 295. In short, the court determined that an entity is a quasi-governmental corporation "if, based on the totality of circumstances, it resembles a governmental corporation in function, effect, or status." Id., ¶9.

         ¶15 Each case involving an alleged quasi-governmental corporation must be decided on the particular facts presented. Id., ¶8. Accordingly, courts must consider a nonexhaustive list of factors (as set forth by the supreme court), with no single factor being outcome determinative. Id. The five factors that guided the court's conclusion that the economic development corporation at issue in Beaver Dam was a quasi-governmental corporation are: (1) whether the entity's funding comes from predominately public or private sources; (2) whether the entity serves a public function; (3) whether the entity appears to the public to be a government entity; (4) the degree to which the entity is subject to government control; and (5) the amount of access governmental bodies have to the entity's records. Id., ¶62. We analyze these factors, as well as other factors we deem relevant, below.

         A. Funding source

         ¶16 A "primary consideration" under the Beaver Dam court's reasoning was that the economic development corporation was funded exclusively by public tax dollars or interest generated on those dollars. Id., ¶10. The court deemed it a "significant factor" that the corporation had cooperative agreements with the City of Beaver Dam that required some combination of annual contributions to the corporation from the city and assignment of a large portion of the room tax the city collected. Id., ¶64. The city also provided the corporation with office space, supplies and clerical support. Id. Thus, the court observed that, like a governmental corporation, the economic development corporation "receives the vast majority of its funds from taxes borne by the public and receives basic support from government sources." Id., ¶65.

         ¶17 The parties disagree about the extent to which the funding factor militates for or against a conclusion that Kemper Center, Inc. is a quasi-governmental corporation. The basis for their disagreement is clear. Kemper Center, Inc. contends that only the County's direct contributions constitute public funding, while Flynn maintains that all "indirect contributions" that Kemper Center, Inc. generates through its programming and rentals should be attributed to the County. We reject Flynn's argument in this regard.

         ¶18 To explain, Kemper Center, Inc. concedes it has historically received donations from the County, although the parties agree nothing compels the County to make such grants.[6] Still, County contributions have occurred every year dating back to 1978, in varying amounts. Initially, the County provided a small amount of money, but starting in 1982, it established a regular pattern of contributing between $50, 000 and $80, 000 to Kemper Center, Inc. annually. After those amounts decreased between 2001 and 2003, starting in 2004 the County has earmarked at least $100, 000 to go directly to Kemper Center, Inc. for its operations.[7] In addition, the County has budgeted varying amounts for capital improvements to Kemper Park, including $72, 000 for a parking lot and a carriage house in 1989, approximately $360, 000 for roof work between 1992 and 1998, and approximately $112, 500 to construct a bike path in 2013. Between 2010 and 2016, the County's contribution to Kemper Center, Inc. remained static at $100, 000 for operations and $50, 000 in capital costs.

         ¶19 A memorandum of understanding relating to a 1998 restoration project states that the County and Kemper Center, Inc. "agree that the primary objective of this project [is] to establish the Kemper Center as a self[-]sustaining entity." The memorandum continues: "As a self-sustaining entity, the Kemper Center will fund operating costs and routine building maintenance, renovation, and restoration costs through rentals and user fees. The Annual County subsidy shall be phased out as set forth in this memorandum of understanding." The 2001-2003 reductions in the County's contributions to Kemper Center, Inc.'s operations fund occurred pursuant to the memorandum, but it is undisputed that Kemper Center, Inc. has not become self-sufficient.

         ¶20 Kemper Center, Inc. does not dispute that it has received contributions from the County for operating and capital expenses. Rather, it argues that these contributions were only a small portion of its total budget. Kemper Center, Inc. observes that direct contributions from the County toward its operational costs, as well as County contributions toward capital costs at Kemper Park, amounted to less than 20% of Kemper Center, Inc.'s total income between 2006 and 2016, and no more than 25% of its income during any given year. By way of illustration, in 2008, Kemper Center, Inc.'s total revenue was $1, 123, 717, which included a $100, 000 County contribution to operations and a $150, 000 County contribution for capital improvements at Kemper Park. Thus, County contributions amounted to approximately 23% of Kemper Center, Inc.'s total revenue that year, with the remaining 77% of revenue being generated by events, fundraising, grants, contributions, memberships, sales and rentals.[8] In 2010, Kemper Center, Inc. had total revenue of $610, 210, including $150, 000 in County contributions (approximately 25%). In 2015, Kemper Center, Inc. generated $634, 188 in revenue, of which the County directly contributed $150, 000 (approximately 24%).[9]

         ¶21 Flynn does not dispute the amount of the County's direct payments and capital contributions to Kemper Center, Inc. Instead, she argues that in addition to those sums, all of the revenue Kemper Center, Inc. generates from its leasehold interest should be viewed as an "indirect contribution" by the County to Kemper Center, Inc. Flynn appears to reason that these sums should be imputed to the County because the County would receive that revenue if it directly operated Kemper Park. Flynn thus views the revenue Kemper Center, Inc. generates from its use of Kemper Park as akin to a government subsidy or assignment. By this measure, Flynn estimates that County "funding" accounts for between 65% and 87% of Kemper Center, Inc.'s total revenue over each of the last five years.

         ¶22 We disagree with Flynn that all revenue Kemper Center, Inc. generates from its use of the leased premises should be imputed to the County for purposes of determining the degree of County funding. It is undisputed that Kemper Center, Inc. is the County's tenant. A landlord typically has no claim to the revenue generated by a tenant without a specific provision in the lease. See Brenner v. Amerisure Mut. Ins. Co., 2017 WI 38, ¶48, 374 Wis.2d 578, 893 N.W.2d 193 (observing that a lessee's purpose for entering into a lease is to "obtain possession of that property and to put it to whatever use may be desirable, so long as it conforms to the terms of the tenancy").

         ¶23 Moreover, Flynn's theory presupposes that if Kemper Center, Inc. was to vacate the premises, the County would have some obligation to assume its duties and operations or, at a minimum, would choose to do so. Neither of these results necessarily follows, either as a matter of logic, law, or from the summary judgment record. Logically, the property is the County's and, as the owner, the County is presumed to have the right to use the property as it wishes should the lease terminate (including shutting Kemper Park down entirely). Legally, Flynn has not presented any evidence demonstrating the County has assumed any obligation to operate Kemper Park upon the termination of Kemper Center, Inc.'s tenancy, or even that it might do so. ...

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