Alberte v. Anew Health Care Services, Inc., 03-2674.

• Decision Date: 29 June 2004
• Docket Number: No. 03-2674.,03-2674.
• Citation: 685 N.W.2d 614,275 Wis.2d 571,2004 WI App 146
• Parties: Lisa K. ALBERTE, Plaintiff-Appellant. v. ANEW HEALTH CARE SERVICES, INC., Defendant-Respondent.
• Court: Wisconsin Court of Appeals

275 Wis.2d 571

2004 WI App 146

685 N.W.2d 614

Lisa K. ALBERTE, Plaintiff-Appellant. v. ANEW HEALTH CARE SERVICES, INC., Defendant-Respondent.¹

No. 03-2674.

Court of Appeals of Wisconsin.

Submitted on briefs June 2, 2004.

Decided June 29, 2004.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of John D. Uelmen of Fair Employment Legal Services, Milwaukee. On behalf of the defendant-respondent, the cause was submitted on the brief of Arthur E. Beck and Katherine L. Williams of Beck, Chaet & Bamberger, S.C., Milwaukee.

Before Wedemeyer, P.J., Fine and Curley, JJ.

¶ 1. FINE, J.

Lisa K. Alberte appeals from an amended judgment entered following the trial court's refusal to include in that amended judgment her reasonable attorney's fees following acceptance by Anew Health Care Services, Inc., of her offer to settle her claim under the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101-12213, and Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e-2000e-17. Alberte contends that her offer of settlement, proffered under WIS. STAT. RULE 807.01(3), included her reasonable attorney's fees in the offer's word "costs." The trial court disagreed. We reverse and remand with directions.

I.

¶ 2. Lisa K. Alberte sued Anew Health Care Services, Inc., contending that it had discriminated against her because of her disability. Alberte v. Anew Health Care Servs., Inc., 2000 WI 7, ¶ 3, 232 Wis. 2d 587, 589-590, 605 N.W.2d 515, 516. The only thing in dispute on this appeal is whether the offer of settlement proffered by Alberte and accepted by Anew Health Care included Alberte's reasonable attorney's fees. The operative part of Alberte's offer reads in full:

PLEASE TAKE NOTICE that, pursuant to Sec. 807.01(3), Stats., Plaintiff Lisa K. Alberte hereby offers to settle all claims against the Defendant Anew Health Care Services, Inc., for the sum of $20,000.00 (Twenty-thousand dollars) with costs.

The offer of settlement was dated February 13, 2001. Later, on February 22 and 23, 2001, the lawyers for each of the parties spoke by telephone and disagreed whether the word "costs" included Alberte's reasonable attorney's fees—Alberte contended that it did; Anew Health Care contended that it did not. Later on February 23, Anew Health Care's lawyer faxed to Alberte's lawyer a document purporting to accept Alberte's offer of settlement, but adding the following underlined language (which was not underlined in the original); "with costs as defined under Wis. Stat. § 814.04 and § 814.16." Alberte's lawyer took this addition as a counter-offer and rejected it.

¶ 3. Subsequently, the parties stipulated that Alberte's original offer of settlement would be deemed to have been accepted and that the dispute of what was encompassed by the word "costs" would be judicially resolved:

It is FURTHER STIPULATED AND AGREED, that the above-captioned matter will be set on for further hearing by the Court for a determination of the amount of costs to be paid by the Defendant under the terms of the settlement, with judgment to be rendered and entered by the Court in accordance with this determination.

Initially, the trial court awarded to Alberte attorney's fees of $22,928, plus what it termed "other disbursements" of $1,535.03, for a total judgment of $44,463.03. On remand, however, following our summary reversal because the trial court appeared to disregard the offer of settlement in awarding judgment, the trial court held that attorney's fees were not included in the offer of settlement's use of the word "costs," and, accordingly, directed entry of an amended judgment for "$20,000.00 plus costs in the amount of $3,123.03, for a total judgment of $23,123.03." No one on this appeal challenges the $3,123.03 figure, except that Alberte contends that her reasonable attorney's fees should be added.

II.

¶ 4. This appeal asks us to apply the terms of Alberte's offer of settlement, and interpret various statutes and rules. This presents issues of law subject to our de novo review. State v. Setagord, 211 Wis. 2d 397, 405-406, 565 N.W.2d 506, 509 (1997) (statutes); Broadhead v. State Farm Mut. Auto. Ins. Co., 217 Wis. 2d 231, 250, 579 N.W.2d 761, 767-768 (Ct. App. 1998) (WIS. STAT. RULE 807.01(3)); Kimberly Area Sch. Dist. v. Zdanovec, 222 Wis. 2d 27, 51, 586 N.W.2d 41, 51 (Ct. App. 1998) (settlement agreement). Federal statutes are also implicated by this case, and in applying them we are bound only by decisions of the United States Supreme Court, Alberte, 2000 WI 7, ¶ 7, 232 Wis. 2d at 591, 605 N.W.2d at 517, and those decisions of the Wisconsin Supreme Court and precedential decisions of this court that do not conflict with United States Supreme Court decisions, State v. Whitaker, 167 Wis. 2d 247, 261, 481 N.W.2d 649, 655 (Ct. App. 1992). Decisions of other federal courts may, of course, be helpful to our analysis of federal law. Alberte, 2000 WI 7, ¶ 7, 232 Wis. 2d at 591, 605 N.W.2d at 517.

¶ 5. WISCONSIN STAT. RULE 807.01(3) provides, as material here:

After issue is joined but at least 20 days before trial, the plaintiff may serve upon the defendant a written offer of settlement for the sum, or property, or to the effect therein specified, with costs. If the defendant accepts the offer and serves notice thereof in writing, before trial and within 10 days after receipt of the offer, the defendant may file the offer, with proof of service of the notice of acceptance, with the clerk of court. . . . If the offer of settlement is not accepted and the plaintiff recovers a more favorable judgment, the plaintiff shall recover double the amount of the taxable costs.

(Emphasis added.) The phrase "taxable costs" in RULE 807.01(3) means those costs "allowed as items of cost under" WIS. STAT. RULE 814.04. Prosser v. Leuck, 225 Wis. 2d 126, 146, 592 N.W.2d 178, 186 (1999). We are aware of nothing that indicates that the word "costs" in the first part of RULE 807.01(3) means anything other than "taxable costs." Costs recoverable under RULE 814.04 include "fees allowed by law." RULE 814.04(2).

¶ 6. As we show below, a plaintiff who prevails in a suit brought under the Americans with Disabilities Act may recover his or her reasonable attorney's fees. The parties assume, and we accept, that Alberte "prevailed" in her claim of disability discrimination. See Maher v. Gagne, 448 U.S. 122, 129 (1980) (party settling on favorable terms has "prevailed"). When an offer-of-settlement provision is implicated, as it is here, costs are added to any settlement, unless the terms of the settlement provide otherwise. Marek v. Chesny, 473 U.S. 1, 6 (1985) (applying Rule 68 of the Federal Rules of Civil Procedure). As Marek explains:

If an offer recites that costs are included or specifies an amount for costs, and the plaintiff accepts the offer, the judgment will necessarily include costs; if the offer does not state that costs are included and an amount for costs is not specified, the court will be obliged by the terms of the Rule to include in its judgment an additional amount which in its discretion, it determines to be sufficient to cover the costs. In either case, however, the offer has allowed judgment to be entered against the defendant both for damages caused by the challenged conduct and for costs.

Id., 473 U.S. at 6 (applying Rule 68) (internal citation omitted, emphasis by Marek). Moreover, "where the underlying statute defines `costs' to include attorney's fees" such fees are "included as costs" under the offer-of-settlement provision. Id., 473 U.S. at 9 (applying Rule 68).² ¶ 7. There, are, arguably, three sources of Alberte's right to attorney's fees: (1) the Americans with Disabilities Act itself, under 42 U.S.C. § 12205; (2) under Title VII, 42 U.S.C. § 2000e-5(k), which is made applicable to the Americans with Disabilities Act by 42 U.S.C. § 12117; and (3) under 42 U.S.C. § 1988(b), made applicable to the Americans with Disabilities Act by 42 U.S.C. § 1981a(a)(2). The material parts of these provisions, with the pivotal language placed in italics, are, in sequence:

(1)

42 U.S.C. § 12205:

In any action or administrative proceeding commenced pursuant to this chapter, the court or agency, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee, including litigation expenses, and costs.

(2)

42 U.S.C. § 12117(a):

The powers, remedies, and procedures set forth in sections 2000e-4, 2000e-5, 2000e-6, 2000e-8, and 2000e-9 of this title shall be the powers, remedies, and procedures this subchapter provides ... to any person alleging discrimination on the basis of disability in violation of any provision of this chapter, or regulations promulgated under section 12116 of this title, concerning employment.

42 U.S.C. § 2000e-5(k):

In any action or proceeding under this subchapter the court, in its discretion, may allow the prevailing party, other than the Commission or the United States, a reasonable attorney's fee (including expert fees) as part of the costs.

(3)

42 U.S.C. § 1981a(a)(2):

In an action brought by a complaining party under the powers, remedies, and procedures set forth in section ... 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-5 . . .) (as provided in section 107(a) of the Americans with Disabilities Act of 1990 (42 U.S.C. 12117(a)), . . . the complaining party may recover compensatory and punitive damages as allowed in subsection (b) of this section, in addition to any relief authorized by section 706(g) of the Civil Rights Act of 1964, from the respondent.

(Parentheses in original.)

42 U.S.C. § 1988(b):

In any action or proceeding to enforce a provision of section[] . . . 1981a, . . . of this title, . . . the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs.

As can be seen, both § 2000e-5(k) and § 1988(b) permit recovery of "a reasonable...