Stathus v. Horst, 02-0543.
| Decision Date | 14 January 2003 |
| Docket Number | No. 02-0543.,02-0543. |
| Parties | George T. STATHUS and Jill J. Stathus, Plaintiffs-Respondents, v. James H. HORST and Georgia J. Edwards, Defendants-Appellants. |
| Court | Wisconsin Court of Appeals |
On behalf of the defendants-appellants, the cause was submitted on the briefs of Lawrence A. Trebon and Gerald J. Mayhew of Trebon & Mayhew, Milwaukee.
On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Joseph J. Kroening of Stevens & Kroening LLC, Brookfield.
Before Wedemeyer, P.J., Fine and Curley, JJ.
¶ 1.
James H. Horst and Georgia J. Edwards appeal from an amended judgment entered after we remanded their case following the first appeal. Horst and Edwards contend that the trial court erred at remand in trebling the damages and in its award of attorney's fees. Because the trial court did not erroneously exercise its discretion in awarding treble damages, we affirm. But, because it erroneously exercised its discretion in awarding attorney's fees, we reverse and remand with directions.
¶ 2. This is the second appeal in this matter. After a bench trial, the trial court concluded that Horst and Edwards intentionally misrepresented the condition of the house that they sold to the Stathuses. The basis for the claim was Horst's and Edward's failure to disclose, either in the Real Estate Condition Report or otherwise, the basement water problems, and the problems related to an underground spring, which ran through the property causing water to flow across the sidewalk in front of the home. As part of the judgment, the trial court awarded the Stathuses $5000 in compensatory damages, and $3000 in attorney's fees. Both parties appealed from those rulings.
¶ 3. On the first appeal, we affirmed the trial court's conclusion that the sellers made a misrepresentation. See Stathus v. Horst, No. 00-0933, unpublished slip. op. (Wis. Ct. App. April 10, 2001) (Stathus I). That factor is not a subject of this appeal. In Stathus I, we also ordered that the award of damages and the attorney's fees be reconsidered because the trial court's awards did not reflect any exercise of discretion. Id. at ¶ 25. The case was remanded to the trial court. After briefing and a review of the record, a successor trial judge trebled the damages to $15,000, and increased the award of attorney's fees to $22,000.1 Horst and Edwards now appeal.
[1]
¶ 4. Horst and Edwards first contend that the trial court erroneously exercised its discretion in trebling the damage award. They argue that they requested the remand court to detail facts to backup the discretion exercised by the original trial court, but not to second-guess the original trial court's discretion or disturb its ruling in any way. Instead, they claim, the remand court supplanted its decision for that of the original trial court without giving any deference to the original trial court, and without giving any facts to support its own exercise of discretion. We are not convinced.
[2, 3]
¶ 5. As noted in our opinion generated from the first appeal, whether to award treble damages under WIS. STAT. § 895.80(3)(a) (1999-2000),2 is a matter left to the discretion of the trial court. We will uphold that ruling as long as the trial court did not erroneously exercise its discretion, which requires a "reasonable inquiry and examination of the facts" to reach a reasonable conclusion. See Howard v. Duersten, 81 Wis. 2d 301, 305, 260 N.W.2d 274 (1977)
. We conclude that, on remand, the trial court complied with our direction and properly exercised its discretion to reach a reasonable conclusion.
¶ 6. In Stathus I, we cited Judge Miller's oral decision: Stathus I, No. 00-0933, at ¶ 25.
¶ 7. In response, we stated: "Here again, we have no way to gauge the trial court's rationale, and accordingly ... we remand this matter to Judge Miller for reconsideration of the damage award and an explanation of the basis for the exercise of his discretion." Id.
¶ 8. If we accept the underlying premise supporting Horst's and Edwards's claim of error, which restricts the trial court's examination of the record to only evidence supporting Judge Miller's conclusions, we would, in effect, render the substance of our remand instruction meaningless. To "reconsider" as directed in our order means: "to consider again especially with the intent to alter or modify." AMERICAN HERITAGE DICTIONARY 1510 (3d ed. 1992); see also Jenson v. Employers Mut. Cas. Co., 161 Wis. 2d 253, 273-74, 468 N.W.2d 1 (1991)
().
¶ 9. We ordered the same judge who presided over the trial to reconsider the question of damages. Regrettably, because of his death, this could not be achieved. Nevertheless, the intent of the order remains the same—to reconsider with the intent of altering or modifying the original ruling. Contemporaneously, the Stathuses filed a motion for reconsideration. The successor judge prudently read relevant portions of the record, ordered additional briefing, and granted oral argument. There was little more that it could do to replicate the trial, and at the same time comply with our remand order. At the conclusion of oral argument, the successor court ruled:
¶ 10. Although Horst and Edwards point out many discrepancies and contradictions in the Stathuses' case, which can be said to support the initial denial of treble damages, the record demonstrates the following facts. The residence had a seepage problem in the basement and an outside spring water problem. For two years during the listing agreement with a real estate agent, Horst and Edwards noted on the Real Estate Condition Report that there was water seepage in the basement, and water emanating from a spring found under the front lawn. During this two-year period, the real estate agent informed Horst and Edwards that the number one reason why the home was not selling was the "leaky basement." On July 31, 1997, the agent's listing agreement expired. A new agent, Fritz Roth, was hired. On August 20, 1997, a new Real Estate Condition Report was executed by Horst and Edwards. Contrary to the earlier report, there was no disclosure of either seepage in the basement, or the existence of the spring under the front lawn, which was causing water to run over the sidewalk.
¶ 11. The logic of the successor court's conclusion is compelling. Because Horst and Edwards knew the reasons why the house was not selling, they chose not to disclose the water problems in the new condition report. On November 14, 1997, the Stathuses signed an offer to purchase and, on December 5, 1997, they purchased the residence. The court concluded that the willful concealment was of such a nature to warrant trebling the damages. There is both a basis in the record, and sound logic in the court's analysis. Thus, the trial court did not erroneously exercise its discretion in following the intent of our remand order.
¶ 12. Horst and Edwards next claim that the trial court erroneously exercised its discretion in awarding attorney's fees in the sum of $22,000. After three days of trial, the Stathuses prevailed in their misrepresentation claim, and the trial court awarded them $3000 in attorney's fees. In the first appeal, the Stathuses claimed that Judge Miller had erroneously exercised his discretion when he reduced their attorney's fee claim of $16,350 to $3000, without any explanation. In Stathus I, we concluded that there was no evidence to show that discretion was actually exercised in making the award; therefore, we remanded the matter to the trial court and asked the trial court to reconsider the attorney's fees award, and explain how it arrived at the award. Stathus I, No. 00-0933, at ¶¶ 22-24.
¶ 13. On remand, and after additional briefing and oral argument, the successor court increased the award for attorney's fees to $22,000 based upon what appears to be an hourly rate multiplied by the hours spent. It discounted the hourly rate of $150 on portions of the time spent on the appeal work, and then declared the award it made to be reasonable. Again, we must reverse and remand on this issue for the reasons that follow.
[4, 5]
¶ 14. A trial court's award of attorney's fees is vested in that court's discretion. Standard Theatres, Inc. v. State Dep't of Transp., 118 Wis. 2d 730, 747, 349 N.W.2d 661 (1984). This discretionary power, however, must, in fact, be exercised. Howard, 81 Wis. 2d at 305. An exercise of discretion requires a reasonable inquiry and an examination of the pertinent facts. Among the factors to be considered are:
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