Schlomer by Bye v. Perina
| Decision Date | 23 June 1992 |
| Docket Number | No. 90-0952,90-0952 |
| Citation | 485 N.W.2d 399,169 Wis.2d 247 |
| Parties | Lyle SCHLOMER, a minor by C.M. BYE, his Guardian ad Litem, Plaintiff-Respondent-Cross Appellant-Petitioner, v. Robert I. PERINA and Northwestern National Insurance Company, Defendants-Appellants-Cross Respondents. |
| Court | Wisconsin Supreme Court |
For the plaintiff-respondent-cross appellant-petitioner there were briefs by Arnold P. Anderson and Mohr, Anderson & McClurg, S.C., Hartford and oral argument by Arnold P. Anderson.
For the defendants-appellants-cross respondents, there was a brief by Virginia L. Newcomb and Bell, Metzner, Gierhart & Moore, S.C., Madison and oral argument by Ms. Newcomb.
This is a legal malpractice action brought by Attorney C.M. Bye on behalf of Lyle Schlomer (Lyle), a minor, against Attorney Robert I. Perina and his insurance company, Northwestern National Insurance Company. The complaint alleges that Attorney Perina was retained to handle a personal injury claim arising out of injuries to Lyle and that Attorney Perina was negligent in handling the claim in that, for approximately three years, he neglected the claim and failed to promptly pursue the personal injury action. Furthermore, the negligence was a substantial factor in causing damages to Lyle, including a loss of use of funds caused by the failure to pursue the claim.
At trial the jury found, and the Eau Claire county circuit court, Judge Roderick A. Cameron, presiding, confirmed that Attorney Perina neglected to pursue Lyle's products liability claim for three years. It was also decided that the neglect of Lyle's claim denied him the ability to invest funds from his settlement, and his claim diminished in value during the period of neglect.
The court of appeals concluded that public policy prevents Lyle from recovering an award for the loss of a larger settlement, because there is no just or sensible stopping point. Schlomer v. Perina, 163 Wis.2d 708, 715, 473 N.W.2d 6 (Ct.App.1991). We agree that public policy considerations preclude the award for the loss of a larger settlement but base our reasoning on the fact that the injury is too remote from the negligence and too out of proportion to the culpability of the negligent attorney. The court of appeals decision is therefore affirmed but on other grounds. 1
The facts impart that Lyle Schlomer was severely injured in 1977 when he was less than two years old. He suffered the loss of his entire right leg and haunch and received severe damage to the left leg and foot when he was caught in a sweep arm of an A.O. Smith Harvestore silo auger.
Lyle's parents did not seek the advice of an attorney or file a suit because the father, Marvin Schlomer, believed a claim was not available to them. 2 In fact, the Schlomers had no contact with any attorney until more than three years (1981) after the accident at which time Attorney Perina contacted them. Attorney Perina advised them the statute of limitations would not run for Lyle until one year after Lyle reaches the age of majority.
Attorney Perina handled the Schlomer case until December, 1984. During this time he prepared a "Day in the Life" film, had professional photographs taken, gathered medical records, consulted with experts, conducted research and investigation, and visited the Schlomer farm several times. In November, 1981, efforts were made to initiate settlement discussions. The discussions never occurred, however, and no effort was made by either the attorney or the Schlomers to contact one another. 3
During this intervening period, Attorney Perina was following the case of Korth v. American Family Insurance Co., 115 Wis.2d 326, 340 N.W.2d 494 (1983). In Korth, this court held that parents who have claims which are derivations of a child's claim have the same statute of limitations as the underlying minor's case. As a result of this holding, Lyle's parents were not barred from filing a claim because suit had not yet been commenced on Lyle's behalf.
Late in November, 1984, Attorney Perina received a letter from Attorney Bye stating that he was representing the Schlomers with regard to Lyle's case. Attorney Perina met with the Schlomers on December 5, 1984, to correct any misunderstandings. The Schlomers decided to continue to have Attorney Perina represent them but later changed their minds and retained Attorney Bye. The case was brought to federal court by Attorney Bye on February 7, 1985. It was settled just prior to trial for a total estimated value of $1,111,236.14 on a structured settlement. 4
Attorney Bye advised the Schlomers that they may have a cause of action against Attorney Perina for "loss of use of funds" and a lesser settlement value because he failed to bring an action to court or settle it while he was representing them. A malpractice suit was subsequently filed and the jury found that Attorney Perina was negligent with respect to his representation of Lyle and that his negligence was the cause of damages to Lyle. The jury decided that Lyle would have recovered $1,270,000 in 1982. The jury also decided that Lyle's loss of use of funds amounted to $406,000.
The trial judge denied defendant's motion after the verdict and found Attorney Perina and his insurance carrier liable for the diminished value of the claim plus $406,000. The court deducted one-third from the $406,000 for attorney fees pursuant to Attorney Perina's contract for contingent fees.
The court of appeals reversed the trial court's decision. The court reasoned: "Recovery for failing to settle a claim at an earlier date for more money ... opens the door to malpractice claims immeasurably wider and resting largely on evidence of an abstract and hypothetical nature." Id. at 715, 473 N.W.2d 6. The court continued in stating that "it is the concern for the absence of a sensible or just stopping point as to each of the three elements of Lyle's cause of action, negligence, causation and damages, rather than any one element that invokes considerations of public policy." Id. We agree that public policy precludes recovery but base our conclusion on different reasoning.
Whether public policy considerations preclude the imposition of liability, even if there is cause in fact, is a pure question of law. Morgan v. Pennsylvania General Ins. Co., 87 Wis.2d 723, 275 N.W.2d 660 (1979); Coffey v. Milwaukee, 74 Wis.2d 526, 541, 247 N.W.2d 132 (1976). The supreme court reviews questions of law de novo. Jones v. Gerhardstein, 141 Wis.2d 710, 733, 416 N.W.2d 883 (1987).
In Coffey, 74 Wis.2d at 541, 247 N.W.2d 132 (quoting Hass v. Chicago & North Western Ry. Co., 48 Wis.2d 321, 179 N.W.2d 885 (1970)), we stated:
... However, negligence plus an unbroken sequence of events establishing cause-in-fact does not necessarily lead to a determination that the defendant is liable for the plaintiff's injuries. The determination to not impose liability in instances where a negligent act has been committed and the act is a 'substantial factor' in causing the injury rests upon considerations of public policy.
We continued by stating:
The application of the public policy considerations is solely a function of the court. Hass, supra 326, 179 N.W.2d 885; ...
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