Evans v. Cameron, 83-2148

• Citation: 360 N.W.2d 25,121 Wis.2d 421
• Decision Date: 03 January 1985
• Docket Number: No. 83-2148,83-2148
• Court: United States State Supreme Court of Wisconsin
• Parties: , 51 A.L.R.4th 1213 Patricia I. EVANS, Plaintiff-Appellant, v. Howard W. CAMERON and Cameron, Shervey, Thrasher & Doyle, Ltd., a Wisconsin service corporation, Defendants-Respondents-Petitioners. *

Page 25

360 N.W.2d 25

121 Wis.2d 421, 51 A.L.R.4th 1213

Patricia I. EVANS, Plaintiff-Appellant, v. Howard W. CAMERON and Cameron, Shervey, Thrasher & Doyle,

Ltd., a Wisconsin service corporation,

Defendants-Respondents-Petitioners.

^*

No. 83-2148.

Supreme Court of Wisconsin.

Argued Oct. 30, 1984.

Decided Jan. 3, 1985.

J. Drew Ryberg, Eau Claire (argued), for defendant-respondent-petitioner Howard W. Cameron; Garvey, Anderson, Kelly & Ryberg, S.C., Eau Claire, on briefs.

Francis J. Wilcox, Eau Claire (argued), for defendant-respondent-petitioner Cameron, Shervey, Thrasher & Doyle, Ltd.

James M. Mason, Wisconsin Rapids (argued), for plaintiff-appellant.

DAY, Justice.

This is a review of a published decision of the court of appeals ¹ reversing an order of the circuit court for Barron county, Honorable Harry F. Gundersen, circuit judge for Burnett county presiding, granting a motion to dismiss plaintiff's complaint made under section 802.06(2)(f), Stats., 1981-82, ² for failure to state a claim. The issue on review is: Should the complaint against Attorney Howard Cameron and his law firm, alleging that Patricia Evans followed his advice and lied while under oath at the first meeting of creditors in a bankruptcy proceeding and that she suffered damages as a result thereof, be dismissed for failure to state a claim upon which relief can be granted?

We hold that the complaint should be dismissed for failure to state claim upon which relief can be granted. We therefore reverse the decision of the court of appeals and reinstate the order of the circuit court.

The complaint set out the following allegations which are relevant to this review:

"2. That the defendant Howard Cameron is an attorney licensed to practice law in the State of Wisconsin who resides in Rice Lake, Barron County, Wisconsin.

"3. That the firm of Cameron, Shervey, Thrasher & Doyle, Ltd., is a Wisconsin service corporation .... When matters complained of herein occurred, defendant Howard Cameron was, upon information and belief, a shareholder in said service corporation.

"4. That in the month of December, 1979, the plaintiff [Patricia Evans] conferred with the defendant Howard Cameron in his office at the offices of Cameron, Shervey, Thrasher & Doyle, Ltd., in Rice Lake, Wisconsin, regarding bankruptcy. At that time, the plaintiff indicated that she was desirous of filing a bankruptcy and she indicated that she had approximately $10,000.00 in cash which she wondered whether she could protect if she filed bankruptcy. The plaintiff was informed by Attorney Cameron that if she were to say that she gave that money to her mother, that she would be able to keep the money and no one would care.

"5. That again on June 2, 1980, the plaintiff asked the defendant, Howard Cameron, what to do in case the matter of the $10,000.00 cash came up at the hearing of the first meeting of creditors and she was advised that she need not worry, that it had been decided that she was to say she had given the money to her mother and that it would not be a matter of contention anyway.

"6. That upon the advise [sic] of said attorney, the plaintiff did so answer at the first meeting of creditors on June 2, 1980.

"7. As a result of her answers on that date, and as a result of the bankruptcy trustee's investigation which showed that that amount of money had never been given to plaintiff's mother by plaintiff, plaintiff is now undergoing investigation and possible prosecution for perjury.

"8. Plaintiff has suffered a great deal of mental and emotional distress and she has been required to retain counsel to represent her in the defense of the aforestated perjury.

"9. Furthermore, the bankruptcy petition of the plaintiff was dismissed.

"10. That all of these damages have been the result of the wrongful and illegal advise [sic] given to the plaintiff by Attorney Cameron.

"11. That as a result of this wrongful and illegal advise [sic] by her counsel, plaintiff is entitled not only to actual and compensatory damages, but to punitive damages as well.

"WHEREFORE, plaintiff demands judgment against the defendants jointly and severally in the amount of $100,000.00 and, in addition thereto, demands punitive damages in the sum of $200,000.00 plus her costs, disbursements and attorney's fees, as well as any other relief which is just and appropriate under the circumstances." ³

In its memorandum opinion of September 20, 1983, the circuit court held that the motion to dismiss should be granted on the basis that, if the allegations are assumed true for purposes of the motion, the parties stood in pari delicto. The circuit court filed an order consistent with that opinion on September 30, 1983.

In its opinion of May 22, 1984, the court of appeals reversed the order of the circuit court. The court of appeals stated that the complaint should be reinstated because, assuming that the allegations are true for purposes of the motion, Ms. Evans' rights against Mr. Cameron and his law firm stem from his agreement to provide legal advice and because her complaint makes allegations that, if proven, could result in relief being granted. Evans, 119 Wis.2d at 377, 350 N.W.2d 728. This court accepted this review to determine whether Ms. Evans' complaint against Mr. Cameron and his firm, alleging that Ms. Evans suffered damage as a result of following Mr. Cameron's advice to lie under oath at the first meeting of creditors in the bankruptcy proceeding, stated a claim upon which relief could be granted.

In their respective answers to Ms. Evans' complaint, both Mr. Cameron and his law firm deny any allegations of wrongdoing. However, to determine if a complaint should be dismissed for failure to state a claim upon which relief can be granted pursuant to a motion under section 802.06(2)(f), Stats., the facts pled are taken as admitted. No inference can be reached in respect to the ultimate facts alleged until resolved by judge or jury. Anderson v. Continental Ins. Co., 85 Wis.2d 675, 683, 271 N.W.2d 368 (1978). The purpose of the motion to dismiss for failure to state a claim is to test the legal sufficiency of the complaint. Anderson, 85 Wis.2d at 683, 271 N.W.2d 368. Since pleadings are to be liberally construed, a claim will be dismissed only if "it is quite clear that under no conditions can the plaintiff recover." Morgan v. Pennsylvania General Ins. Co., 87 Wis.2d 723, 731, 275 N.W.2d 660 (1974), quoting, Clausen and Lowe, The New Wisconsin Rules of Civil Procedure, Chapters 801-803, 59 Marq.L.Rev. 1, 54 (1976).

In pari delicto potior est conditio defendentis is a doctrine which states that in the case of equal fault, the position of the defendant is stronger. Feld & Sons v. Pechner, Dorfman, Etc., 312 Pa.Super. 125, 139 n. 8, 458 A.2d 545 (1983), review denied, 504 Pa. 177, 470 A.2d 525 (1984); Clemens v. Clemens, 28 Wis. 637, 654 (1871). The doctrine of in pari delicto is an application of the principle of public policy that "[n]o court will lend its aid to a man who founds his cause of action upon an immoral or illegal act." Clemens, 28 Wis. at 654, quoting, Lord Mansfield in Holman v. Johnson, 1 Cowper, 341.

The doctrine of in pari delicto is subject to qualifications.

"And indeed in cases where both parties are in delicto concurring in an illegal act, it does not always follow that they stand in pari delicto; for there may be, and often are, very different degrees in their guilt. One party may act under circumstances of oppression, imposition, hardship, undue influence, or great inequality of condition or age; so that his guilt may be far less in degree than that of his associate in the offense. And besides, there may be on the part of the court itself a necessity of supporting the public interests or public policy in many cases, however reprehensible the acts of the parties may be." Feld & Sons v. Pechner, Dorfman, Etc., 312 Pa.Super. at 131, 458 A.2d 545 (1983), quoting, Story Equity Jurisprudence § 423 (14th ed. 1918).

It is clear that Ms. Evans was in delicto. Her act of lying while under oath in the bankruptcy proceeding was both immoral and illegal. At issue is whether the allegations of her complaint, if accepted as true for purposes of this motion, place her in pari delicto with Mr. Cameron requiring dismissal of her complaint. We conclude that those allegations do place Ms. Evans in pari delicto with Mr. Cameron.

Ms. Evans has not alleged any circumstances of oppression, imposition, hardship, undue influence, great inequality of condition or the like. Instead Ms. Evans argues that a client has the right to rely on the advice of the attorney. In the circumstances of this case, this argument is not persuasive.

There may be circumstances in which the advice given by an attorney is so complex that the client would be unaware of the wrongfulness involved in following that advice. In such circumstances, more weight may be given to the influence an attorney will have over the client and the amount of reliance which the client can justifiably place in the attorney. The wrongfulness of lying while under oath, however, is apparent. Absent some allegation of special circumstances constituting an exception to the rule of in pari delicto independent of the attorney-client relationship, the client's deliberate act of lying under oath places that client in pari delicto with the attorney who advised that client to lie.

Given that Ms. Evans and Mr. Cameron would be in pari delicto if the allegations of the complaint, assumed true merely for purposes of this motion, are proven, the second point of concern is whether "there may be on the part of the court itself a necessity of supporting the public interests or public policy ... however reprehensible the acts of the parties may be." We conclude that no such overriding public policy interest exists in this case. Although the public interest is served by discouraging attorney misconduct, it would be inappropriate to promote that interest...