Stivarius v. DiVall, 82-1583
| Decision Date | 07 December 1984 |
| Docket Number | No. 82-1583,82-1583 |
| Citation | 358 N.W.2d 530,121 Wis.2d 145 |
| Parties | Martha E. STIVARIUS, Plaintiff-Respondent, v. Marion DiVALL, individually and as Personal Representative of the Estate of Fred DiVall, a/k/a Frederick DiVall, deceased, David DiVall, individually and as Trustee of the Estate of Fred DiVall, a/k/a Frederick DiVall, deceased, and Richard DiVall, Defendants-Appellants-Petitioners. |
| Court | Wisconsin Supreme Court |
Richard C. Ninneman, Milwaukee, argued, for defendants-appellants-petitioners; Thomas C. Ewing and Whyte & Hirschboeck, S.C., Milwaukee, on brief.
Jack McManus, Madison, argued, for plaintiff-respondent; Dennis J. Sieg and McManus Law Offices, Madison, on brief.
This is a review of a published decision of the court of appeals, Stivarius v. DiVall, 117 Wis.2d 62, 342 N.W.2d 782 (Ct.App.1983), affirming an order of the circuit court for Grant county, William L. Reinecke, Circuit Judge. The order adjudged the plaintiff's action to be frivolous under sec. 814.025, Stats.1981-82, 1 but refused to award the defendant attorney fees.
The parties raise three issues on this appeal: (1) Was there sufficient evidence upon which an award of attorney fees could be based; (2) Do the appellate courts of this state have inherent supervisory powers over the practice of law to conduct an independent review to determine reasonable attorney fees; and (3) Is this an appropriate case for this court to exercise its discretionary power under sec. 751.06, Stats.1981-82, to reverse the order and remand the matter to the circuit court in the interests of justice? 2 Upon careful review of the record in this case, we conclude that the real controversy relating to the frivolousness of the action was never fully tried. Accordingly, we exercise our powers under sec. 751.06 to reverse the decision of the court of appeals and remit the case to the circuit court for further proceedings.
Because an understanding of the several prior judicial proceedings is necessary to decide this review, we begin by summarizing those proceedings. This review arose out of a lawsuit concerning a 1974 land contract between the parties. The suit was commenced in early 1979 by plaintiff, Martha Stivarius, the land contract vendor, against defendant, Marion DiVall, the land contract vendee, personally and in her representative capacities, and against other named defendants, seeking rescission and cancellation of the land contract, foreclosure of defendant's rights in the real estate and monetary damages for injuries to the land. The circuit court found against the plaintiff on the issues of rescission and foreclosure. The jury also found against the plaintiff and awarded no monetary damages. Consequently, the circuit court entered a judgment dismissing the complaint.
After the verdict the plaintiff moved for a new trial. The defendant moved for an order awarding costs and attorney fees under sec. 814.025, Stats.1981-82, on the ground that the plaintiff's action was frivolous. Both parties submitted briefs on the motions, and the circuit court heard counsels' arguments and considered the trial record. The circuit court also received an affidavit submitted by the defendant's counsel in support of the motion for costs and attorney fees. The affidavit set forth a statement of the dates and number of hours worked, the nature of the tasks, and a calculation of attorney fees in the amount of $29,066.25. The circuit court denied the plaintiff's motion for a new trial and granted defendant's motion for attorney fees and costs.
The circuit court concluded that the plaintiff had given false testimony as a sworn witness, that she was motivated by ill will and a desire for revenge in filing suit, and that she intended to cause the defendant to endure excessive burdens or anxieties. The circuit court also found that the action was not frivolous with respect to the plaintiff's attorney and that the plaintiff's trial counsel was not liable for any of the attorney fees awarded to the defendant. The circuit court concluded that $29,066.25 was a reasonable amount for attorney fees and entered judgment against the plaintiff in that amount plus costs.
The plaintiff appealed to the court of appeals from the judgment dismissing her complaint and from the judgment awarding attorney fees and costs to the defendant. The court of appeals in an unpublished decision filed January 26, 1982, 106 Wis.2d 770, 318 N.W.2d 25, affirmed the dismissal of the complaint but indicated that three issues needed to be answered before an award of attorney fees and costs under sec. 814.025 could be made:
(1) whether plaintiff commenced a frivolous action;
(2) if so, the reasonableness of the defendant's attorney fees; and
(3) the appropriate allocation of those fees between the plaintiff and her trial counsel.
The court of appeals was critical of the proceedings before the circuit court. The court of appeals concluded that the circuit court should have held an evidentiary hearing and should have heard evidence before deciding whether the plaintiff's claim was frivolous. The court of appeals further concluded that the plaintiff was entitled, at the hearing in circuit court on a sec. 814.025 motion, first, to examine her trial attorney in an attempt to show that if the claim was frivolous he knew or should have known that fact, and second, to challenge the reasonableness of the defendant's attorney fees and to examine the defendant's attorney for that purpose.
Because the circuit court had not fully considered the three issues, the court of appeals exercised its discretionary powers under sec. 752.35, Stats.1981-82, 3 and reversed and remanded the matter to the circuit court. 4
On remand the circuit court held a hearing. It is this hearing which is the focus of the second appeal to the court of appeals and this review.
It is apparent from the transcript of the circuit court hearing on remand that the circuit court and the parties were uncertain about what the court of appeals expected of them on remand. Apparently the hearing was to be an evidentiary hearing involving the three issues set forth by the court of appeals. When the hearing began, the defendant, as the moving party, was ready to proceed. The plaintiff, however, called her trial counsel as a witness out of turn. The plaintiff's trial counsel--an attorney other than her appellate counsel--testified that he believed that the plaintiff did not wilfully or knowingly lie to him about the facts in the case, that she did not maliciously bring this lawsuit, and that there was a reasonable and supportable basis for the action. He also testified as to the number of hours he spent on the case and the rate charged for his services.
The plaintiff asked her trial counsel whether he had an opinion as to whether or not the claim of the defendant's counsel that the law firm expended 400 hours on the case was reasonable. The plaintiff's trial counsel responded that he had no opinion on that. On cross-examination, the defendant asked the plaintiff's trial counsel what were the prevailing rates of attorney fees in Madison at the time of the trial. The plaintiff's trial counsel responded that he did not really know.
The plaintiff's appellate counsel stated that the plaintiff would testify at the appropriate time. The circuit court then requested counsel to proceed in presenting their cases.
There then occurred a colloquy among counsel and the circuit court relating to judicial notice. The circuit court agreed to "take judicial notice" of the trial record in this case, but, on the insistence of the plaintiff's counsel, it refused to take judicial notice of anything beyond that evidence produced during the trial.
The defendant then called Richard DiVall as a witness. Mr. DiVall testified as to conversations with the plaintiff in early 1979. The defendant introduced this testimony to show plaintiff's ill will to the defendant. The defendant's counsel then said he had no further witnesses to present at that time on the issue of reasonableness of attorney fees. He stated, The defendant's counsel seemed to be referring to his firm's affidavit as to attorney fees which had been submitted at a post-verdict hearing and which he erroneously assumed was before the circuit court.
The plaintiff then asked for a short recess. After the recess, the plaintiff announced that she would present no other witnesses. "Resting" was a tactical decision; the plaintiff immediately moved the court to deny the defendant's motion for attorney fees on the ground that the defendant had failed to prove either that the plaintiff's action was frivolous or that the attorney fees were reasonable.
The defendant's counsel was faced with what became an insurmountable difficulty: Both sides had rested and the court had ruled that it would not take judicial notice of the post-verdict hearing at which the affidavit on attorney fees was submitted. Thus, the court would not consider the only evidence relating to the defendant's attorney fees (the affidavit), and it refused to reopen the hearing and allow testimony on that issue.
Upon considering the trial record and the testimony of the two witnesses at the evidentiary hearing, the circuit court once again held that the plaintiff's action was frivolous under sec. 814.025 and that the plaintiff's trial counsel was not liable for any portion of the fees or costs. The circuit court also held, however, that the defendant had failed to introduce any evidence as to the reasonableness and necessity of their attorney fees and therefore failed to meet her burden of proof on that issue. The circuit court denied the defendant's motion for attorney fees and at a later hearing refused to reconsider its order denying defendant's motion for fees and refused to allow the defendant to...
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