Stern v. Thompson & Coates, Ltd.

• Decision Date: 24 May 1994
• Docket Number: No. 92-2279,92-2279
• Citation: 517 N.W.2d 658,185 Wis.2d 220
• Parties: Walter W. STERN, Plaintiff-Appellant, d Gregory Sell, Plaintiff, v. THOMPSON & COATES, LTD., Susan Perry and National Union Fire Insurance Company of Pittsburgh, PA, Defendants-Respondents-Petitioners. . Oral Argument
• Court: Wisconsin Supreme Court

Page 658

517 N.W.2d 658

185 Wis.2d 220

Walter W. STERN, Plaintiff-Appellant, ^d Gregory Sell, Plaintiff, v. THOMPSON & COATES, LTD., Susan Perry and National Union Fire Insurance Company of Pittsburgh, PA Defendants-Respondents-Petitioners.

No. 92-2279.

Supreme Court of Wisconsin.

Oral Argument May 24, 1994.

Opinion Decided June 23, 1994.

For the defendants-respondents-petitioners there were briefs by Robert H. Bichler, JoAnne M. Breese and Hostak, Henzl & Bichler, S.C., Racine and oral argument by Robert H. Bichler.

DAY, Justice.

This is a review of an unpublished decision of the court of appeals, reversing a judgment of the Circuit Court of Racine County, Honorable Emmanuel J. Vuvunas, judge, which found plaintiff-appellant Walter W. Stern (Atty. Stern) liable for bringing frivolous claims (on behalf of his client) against the defendants, Atty. Susan Perry and her law firm Thompson & Coates (hereinafter Atty. Perry) 179 Wis.2d 503, 508 N.W.2d 75. The circuit court found that Atty. Stern made frivolous claims in violation of both subsection (3)(a) and subsection (3)(b) of sec. 814.025, Stats. ¹ Under sec. 814.025(2), Stats., these costs and reasonable attorney fees were assessed against Atty. Stern.

The court of appeals reversed the circuit court's judgment as to both subsection (3)(a) and subsection (3)(b) of sec. 814.025, Stats. We agree with the court of appeals as to subsection (3)(a), but reverse the court of appeals as to subsection (3)(b). Since the circuit court would be required to assess costs and fees after a judgment under either subsection (3)(a) or subsection (3)(b) of sec. 814.025, Stats., the assessment of costs remains as determined by the circuit court.

The original plaintiff in this action, Gregory Sell (Mr. Sell), is the adjudicated father of Evelyn DeFatte's (Ms. DeFatte's) minor child. Over the years, Mr. Sell and Ms. DeFatte have resorted to the judicial system several times concerning disputes on child support, visitation schedules, and related matters. In the course of these disputes both Mr. Sell and Ms. DeFatte have been represented by several attorneys.

The latest dispute began in August of 1987, when Ms. DeFatte retained the services of Atty Perry to seek a modification of the existing support and visitation order. Atty. Perry had never represented Ms. DeFatte prior to that time.

In an effort to reach a voluntary agreement on these matters, Atty. Perry wrote a letter to Mr. Sell on August 6, 1987, outlining the desired modifications. Atty. Perry requested in the letter that Mr. Sell contact her, but warned that if she did not receive a reply by August 14, 1987, she would initiate an action in court. Mr. Sell received the letter, but did not respond.

When she received no response, Atty. Perry drafted a "Notice of Motion and Motion" along with a supporting affidavit for the modification of support payments, visitation, medical insurance, and tax benefit allocations, which was presented to, and signed by, Judge Dennis Flynn, of the Circuit Court of Racine County, on August 31, 1987. The document ordered Mr. Sell to appear at a hearing scheduled therein for September 17, 1987.

Atty. Perry delivered these documents to the Racine Constable, Lewis Rognerud, (Constable Rognerud), so that they might be served upon Mr. Sell. On September 16, 1987, Constable Rognerud completed an affidavit certifying that "after due and diligent search and inquiry," he could not locate Mr. Sell for service of the documents. He stated that, four attempts were made to serve Mr. Sell and that messages had been left asking Mr. Sell to contact Constable Rognerud's office. Constable Rognerud added in the affidavit that he believed Mr. Sell was avoiding service. Mr. Sell, who claims he received no such messages, did not respond and did not show up at the hearing on September 17, 1987.

When Atty. Perry and Ms. DeFatte appeared before the family court commissioner as scheduled on September 17, 1987, and Mr. Sell was not present, Atty. Perry filed Constable Rognerud's affidavit of nonservice. The family court commissioner, who concurred that Mr. Sell was avoiding service, advised Atty. Perry that she could seek a so-called "body attachment." Atty. Perry was also advised to apply for the body attachment by an assistant district attorney, whose advice she had sought.

The next day Atty. Perry submitted an Affidavit for Attachment before Judge Flynn. In the affidavit Atty. Perry stated that she was representing Ms. DeFatte in an action for revision of support, that a motion to review the child support payments, tax benefit allocations, and medical and hospitalization insurance provisions could not be served on defendant, and that Mr. Sell had failed to appear at the hearing which had been scheduled before the family court commissioner on September 17, 1987. Atty. Perry attested that a "due and diligent search" had been made in the failed attempt to serve the papers on Mr. Sell. The affidavit then requested that an attachment for Mr. Sell be issued and that he be ordered to appear before the family court commissioner on the new date of October 8, 1987.

Judge Flynn signed the body attachment. The body attachment was issued under sec. 885.11(2), Stats., and sec. 818.02(1)(f), Stats. ² The attachment order was sent to the Racine County sheriff for execution, who, in turn, transferred the attachment order to the Kenosha County sheriff's office because Mr. Sell lived in Kenosha County.

The sheriff located Mr. Sell at his home on the night of Friday, the 25th of September, after Mr. Sell telephoned his wife about visiting his son that weekend. He stated that he had returned from extended business trips. The sheriff arrested Mr. Sell pursuant to the body attachment and delivered him to the Racine County sheriff. He was placed in the Racine County jail, where he spent the weekend. Mr. Sell contacted his attorney at the time, Mr. Delcore, but no effort was made to obtain release over the weekend.

On Monday, September 28, Mr. Sell was brought before Judge Flynn who then ordered Mr. Sell to appear at the hearing scheduled before the family court commissioner on October 8, 1987. Mr. Sell was then released. He did attend the hearing on October 8, 1987.

The present action commenced when Mr. Sell sued those he believed were responsible for his arrest and incarceration under the body attachment. Among others, he sued both Racine and Kenosha counties, Ms. DeFatte, who was subsequently dismissed voluntarily from the proceedings, and Ms. DeFatte's lawyer, Atty. Perry, and her law firm, Thompson & Coates, Ltd. It is the suit against Atty. Perry and her law firm which concerns us in this review.

Atty. Perry was sued for abuse of process and false imprisonment for her role in securing the body attachment. It was Atty. Stern's argument on behalf of Mr. Sell that Atty. Perry had committed a fraud upon the court in seeking the body attachment. Specifically, it was alleged that her application for the body attachment was improper and that she had misled Judge Flynn in obtaining the body attachment.

Mr. Sell, however, did not prevail on his claims. Summary judgment was granted as to all the defendants. Following the judgment, three of the defendants, Kenosha County, Atty. Perry, and her law firm brought a motion before the court for attorneys' fees and costs pursuant to sec. 814.025, Stats., and sec. 802.05(1), Stats. ³

On June 23, 1989 Judge Vuvunas held a hearing on the motions for fees. The court found that the action against Kenosha County was frivolous. He requested memorandums of law from counsel before ruling on motions for Atty. Perry and her law firm.

In the interim, Mr. Sell appealed the summary judgment motions in favor of Kenosha County, Atty. Perry and her law firm. The court of appeals affirmed the judgments in Sell v. Thompson & Coates, Ltd., 163 Wis.2d 765, 472 N.W.2d 834 (Ct.App.1991). As to Atty. Perry's conduct, the court of appeals stated emphatically that "[n]o evidence exists of any malice or fraud on Attorney Perry's part," and that "[n]o evidence exists that Attorney Perry was acting in bad faith in applying for the body attachment." Id., at 776, 472 N.W.2d 834. This court denied Mr. Sell's petition for review of that decision.

When the record returned, the circuit court conducted the hearing on the outstanding motions for fees under sec. 814.025, Stats., and sec. 802.05(1), Stats., by Atty. Perry and her law firm. The circuit court concluded that the action against Atty. Perry and her law firm was frivolous under both (3)(a) and (3)(b) of sec. 814.025, Stats. That is, the court concluded both that the suit was intended solely for harassment purposes and that the claims had no reasonable basis in law or equity.

Under sec. 814.025(2), Stats., the court may assess the costs of frivolous claims against the attorney, the client, or both. The court assessed the costs against Mr. Sell's counsel in this action, Atty. Stern.

Atty. Stern appealed. The court of appeals, in an unpublished decision, reversed the circuit court. It reversed the circuit court's ruling as to both subsection (3)(a) and subsection (3)(b) of sec. 814.025, Stats. As to subsection (3)(a), the court of appeals concluded that there were no facts which could support a finding that the suit was commenced "solely for purposes of harassing" the defendant. The court of appeals acknowledged that it must defer to the factual inferences drawn by the circuit court, but it found that this finding by the circuit court was purely "conclusory" and without the requisite finding of fact. The court of appeals, citing Sommer v. Carr, 99 Wis.2d 789, 793, 299 N.W.2d 856 (1981), concluded that a finding of harassment under sec. 814.025(3)(a), Stats., would require that specific findings of those facts which constituted harassment be cited by the circuit court. Since only the conclusion of harassment and no supporting facts were cited, the court...