Hess v. Fernandez
| Decision Date | 25 February 2005 |
| Docket Number | No. 03-0327.,03-0327. |
| Citation | 2005 WI 19,692 NW 2d 655 |
| Parties | John D. Hess, Joan M. Hess, Adrienne V. Hess, and Emily M. Hess, a minor, by William Smoler, her Guardian ad Litem, Plaintiffs-Respondents-Cross-Appellants, Wausau Insurance Companies, Subrogated-Plaintiff, v. Juan Fernandez III, M.D., Defendant-Appellant-Cross-Respondent, Wisconsin Patients Compensation Fund, Defendant-Co-Appellant-Cross-Respondent. |
| Court | Wisconsin Supreme Court |
For the defendant-appellant-cross-respondent there were briefs (in the court of appeals) by Christopher R. Bandt and Nash, Spindler, Grimstad & McCracken, Manitowoc, and oral argument by Christopher R. Bandt.
For the defendant-co-appellant-cross-respondent there were briefs by Jon G. Furlow, Mary C. Turke and Michael Best & Friedrich, LLP, Madison, and oral argument by Jon G. Furlow.
For the plaintiffs-respondents-cross-appellants there were briefs by William Smoler and Smoler Law Office, LLC, Monona, and oral argument by William Smoler.
This case is before us on certification from the court of appeals pursuant to Wis. Stat. § (Rule) 809.61 (2001-02).1 Juan Fernandez, M.D. (Fernandez) and the Wisconsin Patients Compensation Fund (Fund) appeal2 from an order of the Marathon County Circuit Court, Thomas S. Williams, Judge, which granted Joan, John, Adrienne, and Emily Hess's (Hess) post-verdict motion to amend the pleadings to allow an award of costs and reasonable actual attorney fees pursuant to Wis. Stat. § 51.61(7)(a). The circuit court, relying on Wis. Stat. § 802.09(2),3 held that Fernandez and the Fund had impliedly consented to the trial of § 51.61 issues and that they were not prejudiced as a result of the amendment.
¶ 2 We conclude that the circuit court erroneously exercised its discretion by granting the motion to amend the pleadings to include Hess's new claim. In doing so, we determine that there was no express or implied consent by Fernandez or the Fund to try the issues raised by the Wis. Stat. § 51.61 claim, and that the circuit court did not properly apply the balancing test when it allowed the amendment of the pleadings.
¶ 3 Additionally, we hold that, irrespective of the amendment, the Fund cannot be liable for costs and reasonable actual attorney fees under Wis. Stat. § 51.61(7)(a). The Fund is not a "person," and therefore is incapable of violating any rights of a patient under the statute.
¶ 4 Joan Hess began counseling sessions with therapist Carolyn Decker (Decker) in August 1990. Decker employed hypnosis to regress her in order to learn more about her childhood. Her condition deteriorated, however, and she was hospitalized in May 1991. Fernandez was her admitting physician at the hospital. He had participated in her treatment since March 1991, and increased his role during her hospitalization. Fernandez authorized her continued treatment with hypnotherapy, and began personal sessions with her in November 1991. At some point during those treatments, Joan Hess began to recover memories of sexual abuse and other unusual scenarios, such as images of her father and other relatives participating in cult activities, like killing and eating babies, bestiality, and group sex. Eventually, she came to believe that her father had molested her as a child, and subsequently filed a lawsuit against him for sexual abuse.
¶ 5 Joan Hess's condition continued to deteriorate throughout 1992, forcing her to be hospitalized on five separate occasions. In May 1992, Fernandez diagnosed her with multiple personality disorder. In addition, Fernandez agreed that she should undergo a hysterectomy because she suffered anxiety at the sight of blood.
¶ 6 In July 1994, Joan Hess ended her care with Fernandez. Over the next couple of years, she came to realize that her memories, and the diagnosis of multiple personality, were false and caused by Fernandez. In March 1995, Hess filed a claim under Wis. Stat. ch. 655 against Decker4 and Fernandez, alleging negligence and failure to obtain informed consent before providing Joan Hess's psychiatric treatment. They named the Fund as a defendant pursuant to Wis. Stat. § 655.27(5)(a)2.
¶ 7 Hess retained an attorney for the malpractice claim, but did not contract with him on an hourly basis. Instead, they agreed to pay him on a contingent fee basis, which would amount to thirty-three and one-third percent (33 1/3%) of any "lump sum amount" recovered after the commencement of trial. Fernandez and Decker each obtained separate representation. However, nearly 18 months into the lawsuit, Fernandez's counsel assumed additional representation for the Fund.
¶ 8 On September 2, 1999, a jury returned a verdict for Hess on the medical malpractice claims, finding that Fernandez had negligently treated Joan Hess and failed to obtain informed consent for her treatment. The jury awarded plaintiffs $861,538.46 in damages, including $450,000 for Joan Hess. The remainder was awarded to her husband and children for derivative claims.
¶ 9 After the verdict, Hess moved to amend the pleadings to recover costs and reasonable actual attorney fees under Wis. Stat. § 51.61(7)(a).5 Hess alleged that because Fernandez denied her "prompt and adequate treatment," as guaranteed under § 51.61(1)(f),6 they qualified to receive payment under § 51.61(7)(a). Although their original pleadings did not include a claim under § 51.61, the circuit court granted the motion,7 concluding that Fernandez had violated Joan Hess's right to adequate treatment based on the jury's finding of negligence. However, the amount of costs and fees was to be determined at a later date.
¶ 10 After the circuit court granted the post-verdict motion, it awarded Hess $911,409.81 in reasonable actual attorney fees under Wis. Stat. § 51.61(7)(a), reducing the request by the time Hess's attorneys spent on derivative claims and other matters. The court also awarded Hess costs in the amount of $295,567.43, minus statutory costs that had already been paid. The court instructed the parties either to determine the actual amounts based on the decision or to mediate. Ultimately, the court entered a judgment on the § 51.61(7)(a) claim for Hess in the amount of $1,250,576.73, which included the costs and reasonable actual attorney fees in pursuing the post-verdict motion to amend.8
¶ 11 Fernandez and the Fund were unsuccessful in motions for reconsideration. The court of appeals certified the issues to this court. We accepted certification of all issues raised in the certification from the court of appeals, and we now reverse for the reasons set forth herein.
¶ 12 The first issue that we address is whether the circuit court erred in allowing Hess to amend the original pleadings to include a claim for costs and reasonable actual attorney fees under Wis. Stat. § 51.61(7)(a). Such a decision by the circuit court to grant leave to amend a complaint is discretionary. Finley v. Culligan, 201 Wis. 2d 611, 626, 548 N.W.2d 854 (Ct. App. 1996). A court misused its discretion if the court failed to exercise its discretion, the facts do not support the court's decision, or the court applied the wrong legal standard. Id. On review, we will not upset a discretionary decision unless such discretion was erroneously exercised. Stanhope v. Brown County, 90 Wis. 2d 823, 834, 280 N.W.2d 711 (1979). A circuit court has properly exercised its discretion when it has "examined the relevant facts, applied a proper legal standard, and, using a demonstrated rational process, reached a reasonable conclusion." Martindale v. Ripp, 2001 WI 113, ¶28, 246 Wis. 2d 67, 629 N.W.2d 698 (citations omitted).
¶ 13 When reviewing the legal standard in this case, we look first to Wis. Stat. § 802.09(2). This subsection, along with § 802.09(1),9 sets forth the applicable standards for the circuit court to apply in deciding if an amendment conforms to the evidence:
If issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to so amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice such party in maintaining the action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence.
Wis. Stat. § 802.09(2). For our review, we interpret each of the parts of the statute as governing separate factual scenarios. State v. Peterson, 104 Wis. 2d 616, 629, 312 N.W.2d 784 (1981).
¶ 14 The first part of subsection (2) addresses a scenario where the unpleaded issues are tried by the express or implied consent of the parties. Zobel v. Fenendael, 127 Wis. 2d 382, 387, 379 N.W.2d 887 (Ct. App. 1985). We have interpreted this first section of the subsection to be mandatory. Peterson, 104 Wis. 2d at 629. If there is a determination that the issue was tried by the express or implied consent of the parties, the court must amend the pleadings to conform with the proof presented at trial. Id. To determine implied consent, the court must use the test of actual notice, and if it finds no actual notice, it should find no implied consent to try the unpleaded issue. Id. at 634. If, on the other hand, the circuit court finds that there was no consent to the trial of the unpleaded issue, it must apply a balancing test and make an "interests of justice" determination....
To continue reading
Request your trial
-
Phelps v. Physicians Ins. Co. of Wisconsin, Inc.
...two rulings were erroneous exercises of discretion because they reflect a complete absence of discretionary decision-making. See Hess v. Fernandez, 2005 WI 19, ¶ 12, 278 Wis. 2d 283, 692 N.W.2d 655 ("A court misused its discretion if the court failed to exercise its discretion, the facts do......
-
Wis. Mfrs. & Commerce v. Evers
...in any way prejudiced or deprived of adequate notice. Tri-State Home Improvement, 77 Wis. 2d at 658, 253 N.W.2d 474 ; Hess v. Fernandez, 2005 WI 19, ¶23, 278 Wis. 2d 283, 692 N.W.2d 655 (explaining that a defendant can overcome the preference for amendments by demonstrating "undue delay, [d......
-
Wisconsin Mfrs. & Commerce v. Evers
...were not in any way prejudiced or deprived of adequate notice. Tri-State Home Improvement, 77 Wis. 2d at 658, 253 N.W.2d 474; Hess v. Fernandez, 2005 WI 19, ¶23, 278 Wis.2d 283, 692 N.W.2d 655 (explaining that a defendant can overcome the preference for amendments by demonstrating "undue de......
-
Wilson v. Tuxen
...to exercise its discretion, the facts do not support the court's decision, or the court applied the wrong legal standard." Hess v. Fernandez, 2005 WI 19, ¶ 12, 278 Wis.2d 283, 692 N.W.2d ¶ 37 Here, the court denied the motion in part and granted it in part. The court allowed two other claim......
-
Wisconsin Court of Appeals rules party can amend pleadings mid-trial.
...nearly identical language, sec. 804.11. The court's analysis arguably conflicts with the Supreme Court opinion in Hess v. Fernandez, 2005 WI 19, 278 Wis.2d 283, 692 N.W.2d In Hess, the Court held that the circuit court erroneously exercised its discretion by granting a motion to amend plead......