SB 188

This bill directs expenditure of $129,693.02 from the general fund in payment

of a claim against the Department of Workforce Development (DWD) and the

Department of Administration (DOA) by Workforce Resource, Inc. The claimant

asserts that, at the behest of DWD, it executed a master lease agreement with a third

party for a facility in the city of River Falls to be occupied by DWD in 2006 and made

modifications to the facility to meet DWD's specifications. DWD then occupied the

modified space in the facility for use as a state job center. The claimant attempted

to negotiate and execute a written sublease with DWD for the occupied space but was

unsuccessful. DWD made rental payments to the claimant on a month-to-month

basis during its occupancy and then vacated the premises in June 2008. The

claimant asserts that there was an unsigned lease agreement between the claimant

and the state, as represented by DWD and DOA. Although certain formal requisites

are necessary under Wisconsin law for a lease agreement to be enforceable, s. 706.04,

stats., provides that if all of the elements of a transaction are clearly and

satisfactorily proved, the transaction may be enforceable under certain conditions by

a court using its equitable powers. DWD and DOA assert that since under state law

DWD has no authority to lease property without the approval of DOA, any implicit

agreement by DWD is not enforceable against the state. They also assert that there

was a disagreement between the claimant and the state over the rental amount and

the claimant's acceptance of a reduced amount on a month-to-month basis

constitutes acceptance of the state's position concerning the rental amount. The

claimant claimed $129,693.02, based upon underpayment of rental payments by the

state during its occupancy of the facility and full rental payments for the remainder

of the term of occupancy (August 31, 2011), because the modified space was not

readily rentable to another tenant and therefore remained vacant after DWD

terminated its occupancy. This claim was presented to the claims board in the

amount of $120,833.12 and was denied (see 2009

Senate Journal

, p. 817).