Elmakias v. Wayda

• Citation: 228 Wis.2d 312,596 N.W.2d 869
• Decision Date: 13 May 1999
• Docket Number: No. 98-3222.,98-3222.
• Parties: IN the MATTER OF the ATTORNEY FEES RE: Yehuda ELMAKIAS, Plaintiff-Respondent, v. Michael WAYDA, Defendant, Atty. David SPARER, Appellant.
• Court: Court of Appeals of Wisconsin

228 Wis.2d 312

596 N.W.2d 869

IN the MATTER OF the ATTORNEY FEES RE:

Yehuda ELMAKIAS, Plaintiff-Respondent, v. Michael WAYDA, Defendant, Atty. David SPARER, Appellant.

No. 98-3222.

Court of Appeals of Wisconsin.

Submitted on briefs March 11, 1999.

Decided May 13, 1999.

On behalf of the appellant, the cause was submitted on the briefs of David R. Sparer of King Street Law Collective, Inc. of Madison.

On behalf of the plaintiff-respondent, the cause was submitted on the brief of William A. Abbott of Bell, Gierhart & Moore, S.C. of Madison.

Before Dykman, P.J., Eich and Deininger, JJ.

DYKMAN, P.J.

Attorney David R. Sparer appeals from an order holding him liable for fees under § 814.025(3)(a), STATS.,¹ for pursuing frivolous claims on behalf of his client, Michael Wayda. He argues that there is no evidence to support the court's decision that he acted in bad faith, solely for the purpose of harassing or maliciously injuring Yehuda Elmakias. We disagree and affirm.

BACKGROUND

This case stems from a highly contentious landlord-tenant dispute. The following is a brief overview of the parties' relationship. In 1995, Michael Wayda signed a lease to rent residential property from Yehuda Elmakias. During his tenancy, Wayda violated various terms of the lease and engaged in substantial threatening and intimidating behavior toward Elmakias and his wife. Wayda restricted when Elmakias could show his unit to other potential tenants, and often the police needed to be present before he would allow Elmakias onto the property. There is a videotape of Wayda yelling at and threatening Mr. and Mrs. Elmakias when they attempted to enter his unit to conduct an inspection and make certain repairs, despite the fact that Wayda's attorney had already given permission for them to enter the premises for these purposes.

In November 1995, Wayda notified the city building inspector that Elmakias was in violation of the city housing code. The building inspector conducted an inspection and found two relatively minor problems with the unit, which he ordered Elmakias to fix.² In February 1996, Wayda, through his attorney, wrote a letter to Elmakias in which he made several complaints for lack of repair, failure to make promised repairs and other matters. Wayda also advised Elmakias in this letter that his failure to make these repairs created a right to rent abatement under § 704.07(4), STATS. Elmakias did not respond to the letter.

On March 14, 1996, Wayda filed suit against Elmakias in small claims court requesting rent abatement for the claims outlined in the February 1996 letter. On May 23, 1996, Elmakias filed a summons and complaint to evict Wayda for allegedly not paying the balance of his security deposit or his May rent, and for not responding to a list of compliance items requesting that he clean and restore the property to its original condition.

In his answer to the eviction action, Wayda stated that he placed the amounts owing into his attorney's trust account rather than paying them directly to Elmakias, and that he notified Elmakias of this fact in a letter. He also raised a counterclaim for retaliatory eviction, arguing that Elmakias was attempting to evict him because he had contacted the building inspector and filed a suit for rent abatement. Elmakias filed a reply arguing that Wayda's claims were frivolous.³ Wayda made a subsequent motion to dismiss Elmakias's eviction action on the grounds that he was given inadequate notice under the terms of the lease. The court agreed and dismissed Elmakias's eviction action, but it did not dismiss Wayda's counterclaim for retaliatory eviction.

On December 18, 1996, Elmakias again replied to Wayda's counterclaim and raised his own counterclaim in which he asserted that Wayda had built a fence higher than six feet tall without his knowledge or permission, which led Wayda's neighbor (Affeldt) to raise a nuisance claim against Elmakias. Elmakias states that he was forced to defend against this claim at a cost of around $5,000.

In March 1997, Elmakias and Wayda each moved for partial summary judgment regarding the other's claims. Wayda moved for summary judgment on the date that the lease terminated so as to respond to Elmakias's claims that he was responsible for rents and other costs allegedly incurred after that date. He also moved for summary judgment regarding Elmakias's claim that his suit against Affeldt would have settled had Wayda not built the "spite" fence that blocked Affeldt's view. The court denied the former and partially granted and denied the latter. The court said that Elmakias could present a claim that Wayda's installation of the fence was a lease violation, but that he could not recover damages for the effect the fence installation had on Elmakias's separate lawsuit against Affeldt. Elmakias moved for summary judgment on several of Wayda's claims, most notably his counterclaim for retaliatory eviction. That claim was denied. At trial, the court ruled in Elmakias's favor on all remaining claims. Elmakias and Wayda then filed post-trial motions alleging that the other violated § 814.025, STATS., by commencing frivolous actions. The court denied Wayda's motion, but granted Elmakias's motion.⁴ In its decision to award fees, the court made the following observations:

From what was a nasty, but essentially clear-cut landlord/tenant dispute has grown a legal briar patch of defendant's creation. Everyone associated with this case seems to have become ensnared by its ever-expanding complexities, increasingly harsh accusations, and endless litigation. Particularly as viewed by the defendant and his counsel, no amount of court attention is enough; no number of words or pieces of paper is too many.

The defendant, himself, admitted that he wanted "leverage" against Mr. Elmakias. It is clear after days and days of testimony and thousands of written words, that he used not just one, but several, shotguns in fashioning his legal strategy. Mr. Wayda and his lawyer employed what the Wisconsin Supreme Court has labeled "win-at-all-costs, scorched-earth tactics." Cheveron Chem. Co. v. Deloitte & Touche, 176 Wis. 2d 935, 945, 501 N.W.2d 15, 19-20 (1993). An overview of this case shows their effort to overwhelm their adversary, and perhaps this court as well. It cannot have been an accident that many of the Ag. Code and Ordinance violations claimed by [Wayda] also meant attorneys fees or multiplied damages if he prevailed. [See Fidelity and Deposit Co. v. Krebs Engineers, 859 F.2d 501, 506 (7th Cir. 1988)

]

The court awarded fees under § 814.025(3)(a), STATS., and said:

It is calculated that the fees incurred by [Elmakias] ... total $11,161.00. It is the specific finding that these fees are fair and reasonable and that they were incurred by [Wayda's] continuation "... in bad faith, solely for the purpose of harassing or maliciously injuring" Yehuda Elmakias. It is further found that of the sum, defendant Michael Wayda is personally responsible for $9,161.00, and his attorney, David Sparer, is personally responsible for $2,000.00 for his contribution by continuing to pursue the claims and defenses of [Wayda] when he should have known they were meritless and being maintained for improper purposes....

Sparer appeals from the trial court's order to hold him personally liable for $2,000.00 of Elmakias's attorneys fees.

DISCUSSION

Sparer appeals from the court's decision to hold him personally liable for fees under § 814.025(3)(a), STATS. Section 814.025(3)(a), STATS., allows courts to assess costs and fees against a party or that party's attorney for commencing, using, or continuing a frivolous action, special proceeding, counterclaim, defense or cross-complaint in bad faith, solely for purposes of harassing or maliciously injuring another. Sparer argues that because the trial court made no specific finding as to how he personally acted with the sole motive or purpose of harassing or injuring Elmakias, we must reverse.

[1]

Whether an attorney or a party violated § 814.025(3)(a), STATS., is a question analyzed under a subjective standard. See Stern v. Thompson & Coates, Ltd., 185 Wis. 2d 220, 235-36, 517 N.W.2d 658, 663 (1994)

. The trial court must determine what was in the person's mind and whether his or her actions were deliberate or impliedly intentional regarding harassment or malicious injury. See id. at 236, 517 N.W.2d at 663-64. The findings must be specific, because "`[t]he [frivolous claims] statute does not allow the trial judge to conclude frivolousness or lack of it without findings stating which statutory criteria were present....'" Id. at 236, 517 N.W.2d at 664 (quoting Sommer v. Carr, 99 Wis. 2d 789, 792, 299 N.W.2d 856, 857(1981)).

Whether a party or attorney made a frivolous claim in violation of § 814.025(3)(a), STATS., presents a mixed question of law and fact. See Stern, 185 Wis. 2d at 236,

517 N.W.2d at 664. The court's findings as to "what was said, what was done, what was thought, and reasonable inferences drawn therefrom, are questions of fact." Id. Such findings will not be upset unless they are clearly erroneous. See § 805.17(2), STATS. However, the ultimate conclusion of whether the facts cited fulfill the frivolous standard is a question of law that we review de novo. See Stern, 185 Wis. 2d at 236,

517 N.W.2d at 664.

Because the inquiry under § 814.025(3)(a), STATS., "is subjective, and not generally susceptible to direct proof, the state of mind of the person `must be inferred from the acts and statements of the person, in view of the surrounding circumstances.'" Stern, 185 Wis. 2d at 236-37,517 N.W.2d at 664 (quoting Pfeifer v. World Serv. Life Ins. Co., 121 Wis. 2d 567, 569, 360 N.W.2d 65, 66 (Ct. App. 1984)). We must accept a reasonable inference drawn by the trial court from established facts even if more than one reasonable inference may be drawn. See id. at 237, 517 N.W.2d at 664. Whether an inference is reasonable is itself a...