Lewis v. Vill. of Hobart

• Court: Wisconsin Court of Appeals
• Writing for the Court: PER CURIAM.
• Citation: Lewis v. Vill. of Hobart, 356 Wis.2d 328, 855 N.W.2d 492 (Wis. App. 2014)
• Decision Date: 01 July 2014
• Docket Number: No. 2013AP2048.,2013AP2048.
• Parties: David J. LEWIS, Plaintiff–Appellant, v. VILLAGE OF HOBART, Defendant–Respondent.

356 Wis.2d 328

855 N.W.2d 492 (Table)

David J. LEWIS, Plaintiff–Appellant

v.VILLAGE OF HOBART, Defendant–Respondent.

No. 2013AP2048.

Court of Appeals of Wisconsin.

July 1, 2014.

Opinion

¶ 1 PER CURIAM.

David Lewis appeals a judgment awarding him $46,200 in reasonable attorney fees in this condemnation action. Lewis asserts the actual cost of his representation was much higher, and the circuit court erred by applying the rebuttable presumption contained in Wis. Stat. § 814.045(2)¹ that a reasonable fee is no greater than three times the amount of compensatory damages. He also asserts that § 814.045, which was enacted after this action was commenced, cannot be applied retroactively. We reject Lewis's arguments and affirm.

BACKGROUND

¶ 2 In 2009, Lewis refused the Village of Hobart's highest written offer of $98,000 to purchase two of Lewis's properties. Hobart then submitted a jurisdictional offer of $74,600. Lewis commenced the present action to appeal the award.

¶ 3 After a day of trial to the court, the parties stipulated to an award of $90,000, which required Hobart to make an additional $15,400 payment to Lewis. Pursuant to Wis. Stat. § 32.28, the stipulation allowed Lewis to recover reasonable litigation expenses, including reasonable attorney fees, in an amount to be determined by the court.

¶ 4 The parties disagreed about what constituted “reasonable” expenses. Lewis requested $75,055.75 in attorney fees. Hobart argued this demand was unreasonable under Wis. Stat. § 814.045, which sets forth factors to consider when determining the reasonableness of a fee, and establishes a rebuttable presumption in certain cases that a reasonable fee is three times the amount of compensatory damages. Because Lewis ultimately obtained an additional award of $15,400, Hobart argued the presumptively reasonable amount of attorney fees under § 814.045 was $46,200.

¶ 5 Lewis argued Wis. Stat. § 814.045 was inapplicable because it was enacted after this action was commenced and could not be applied retroactively. At a hearing on the attorney fee issue, Lewis also argued § 814.045 conflicted with the statute authorizing attorney fees in condemnation cases, Wis. Stat. § 32.28.

¶ 6 The circuit court resolved the attorney fee dispute in a twenty-four-page written order. The court first concluded Wis. Stat. § 814.045 was a procedural statute, not a substantive one, and should be applied retroactively. It observed the statute did not place any additional responsibility on Lewis, as the burden of demonstrating reasonableness already rested with the party claiming the fee. It also determined the rebuttable presumption did not act as a cap, stating, “If Lewis can demonstrate that the amount he claims is reasonable, he will be awarded that amount, presumption or no presumption.”

¶ 7 The court then applied the factors set forth in Wis. Stat. § 814.045(1).² The court concluded the issues involved in the case were not particularly complex and Lewis had not met his burden of showing all the time expended by his attorneys on the case was reasonable. The court observed that Lewis's Minnesota counsel charged $400 per hour, whereas local counsel charge approximately $200 per hour, and it found Lewis was not entitled to reimbursement for seeking more expensive counsel.³ It also found a higher award was not justified by the amount of damages involved in the action, the outcome of the litigation, or the experience and reputation of Lewis's counsel. Lewis supplied a copy of the judgment in a 2012 case awarding over $200,000 in fees, but the court found this insufficient because nothing indicated how the fees were calculated. Lewis did not submit any other examples of awards in condemnation cases. Based on the structure of Lewis's fee agreement, the court determined Lewis “would likely not have to pay the hourly rate that his attorneys are seeking from [Hobart].”⁴

¶ 8 Given these factors, the court determined Lewis failed to rebut the presumption under Wis. Stat. § 814.045(2). It therefore found that “the presumption is appropriate and that reasonable attorney fees do not exceed three times the amount of compensatory damages awarded....” The court then entered a judgment awarding Lewis $46,200 in attorney fees—three times the additional amount recovered of $15,400. Lewis appeals.

DISCUSSION

¶ 9 The primary question presented by this appeal is whether the presumption under Wis. Stat. § 814.045(2) applies to Lewis's request for reasonable attorney fees under Wis. Stat. § 32.28. Answering this question requires us to interpret and apply statutes, and we do so de novo. N.E.M. by Kryshak v. Strigel, 208 Wis.2d 1, 6, 559 N.W.2d 256 (1997). In addition, we must determine whether § 814.045 can be applied retroactively, because it was enacted after this matter was commenced. We review the retroactivity of a statute de novo. See Snopek v. Lakeland Med. Ctr., 223 Wis.2d 288, 293, 588 N.W.2d 19 (1999).

¶ 10 Generally in Wisconsin, a prevailing party is not entitled to collect attorney fees from the opposing party as a part of his or her damages or costs. Watkins v. LIRC, 117 Wis.2d 753, 758, 345 N.W.2d 482 (1984). This rule, known as the “American Rule,” may be modified by statute. Id. In eminent domain cases, reasonable attorney fees and other litigation expenses may be recoverable under Wis. Stat. § 32.28.

¶ 11 Wisconsin Stat. § 32.28 does not elucidate what constitutes “reasonable” attorney fees. See Standard Theatres, Inc. v. DOT, 118 Wis.2d 730, 740, 349 N.W.2d 661 (1984) (“There is absolutely no language in the statute referring to the limits of what is a reasonable or necessary fee....”). Historically, Wisconsin courts have looked to factors like the amount and character of the services rendered, the labor, time, and trouble involved, the character and importance of the litigation, the amount of money or value of the property affected, the professional skills and experience called for, and the standing of the attorney in the legal profession. See Trojan v. Trojan, 79 Wis.2d 3, 5, 255 N.W.2d 305 (1977) (per curiam); State v. Sidney, 66 Wis.2d 602, 607, 225 N.W.2d 438 (1975).

¶ 12 In 2011, the legislature passed 2011 Wis. Act 92, which created Wis. Stat. § 814.045. The statute identifies factors for courts to consider in a dispute over the reasonableness of attorney fees. It also creates a presumption, applicable “[i]n any action in which compensatory damages are awarded,” that “reasonable attorney fees do not exceed 3 times the amount of the compensatory damages awarded....” Wis. Stat. § 814.045(2)(a). The presumption may be overcome if the court determines, after considering the enumerated factors and any other factor the court deems important or necessary to consider, that a greater amount is reasonable. Id.

¶ 13 Lewis's primary appellate argument is that the presumption under Wis. Stat. § 814.045(2) does not apply in eminent domain actions. He reasons that an action disputing an award of compensation concerns the constitutional guarantee of “just compensation,” and is not an action involving compensatory damages. See Wis. Const. art. I, § 13. As authority, Lewis relies on cases that he takes to stand for the proposition that damages typically classified as “compensatory damages” are not available in eminent domain cases. See City of Milwaukee Post No. 2874 Veterans of Foreign Wars v. Redevelopment Auth. of Milwaukee, 2009 WI 84, ¶ 52, 319 Wis.2d 553, 768 N.W.2d 749 (consequential or incidental damages unavailable in eminent domain cases); DeBruin v. Green Cnty., 72 Wis.2d 464, 470–72, 241 N.W.2d 167 (1976) (damages for “inconvenience” excluded from just compensation).

¶ 14 Lewis presents this argument for the first time on appeal. “It is a fundamental principle of appellate review that issues must be preserved in the circuit court. Issues that are not so preserved, even alleged constitutional errors, generally will not be considered on appeal.” Dalka v. American Family Mut. Ins. Co., 2011 WI App 90, ¶ 5, 334 Wis.2d 686, 799 N.W.2d 923. The forfeiture rule gives parties incentive to “apprise circuit courts of specific arguments in a timely fashion so that judicial resources are used efficiently and the process is fair to the opposing party.” Townsend v. Massey, 2011 WI App 160, ¶ 26, 338 Wis.2d 114, 808 N.W.2d 155. An appellant like Lewis, who fails to adequately raise an issue below, takes the chance that we will not elect to hear the issue. See Arsand v. City of Franklin, 83 Wis.2d 40, 55–56, 264 N.W.2d 579 (1978).

¶ 15 Lewis responds that he did raise the issue of Wis. Stat. § 814.045(2)' s applicability in the circuit court. His attorney stated at the hearing, “I don't think [§ 814.045(2) ] should apply in any condemnation case.” However, Lewis's sole argument was that § 814.045(2) conflicted with Wis. Stat. § 32.28, and that the specific dictates of Wis. Stat. ch. 32 control over a “general procedural” rule like § 814.045. Lewis did not argue § 814.045(2) is inapplicable in an eminent domain case because such cases do not involve compensatory damages.

¶ 16 A party cannot avoid the forfeiture rule simply because he or she raised a general issue in the circuit court. See Townsend, 338 Wis.2d 114, ¶ 21, 808 N.W.2d 155. Raising a general issue does not preserve all arguments that might somehow relate to that issue. Id., ¶¶ 21, 27. Instead, the forfeiture rule focuses on whether particular arguments have been preserved. Id., ¶ 25. Framing the rule in this way prevents circuit courts from being “blindsided” by appellate courts and gives circuit courts the ability to “correct any error with minimal disruption of the judicial process, eliminating the need for appeal.” Id., ¶ 26 (citing State v. Ndina, 2009 WI 21, ¶ 30, 315 Wis.2d 653, 761 N.W.2d 612 ). In a nutshell, the forfeiture rule is a critical tool for promoting judicial efficiency, and we believe the circuit court should have been given the first opportunity to determine whether an eminent domain case involves ...