*1 Randy Plaintiff-Appellant, L. Betz,
v. Diamond Jim's Auto Sales, Defendant-Respondent-Petitioner.
Supreme Court
Argument
No.
January
2012AP183. Oral
July
Decided
For Aiken, J. R Susan M. Grzeskow- Timothy Megna, Vincent S.C., iak, Milwaukee, and oral and Aiken & Scoptur, J. Aiken. by Timothy Susan Grzeskowiak argument J. This ZIEGLER, 1. ANNETTE KINGSLAND v. appeals, is a review of a decision of the court of Betz App Sales, 131, Diamond Jim's Auto 2012 WI reversing Wis. 2d an N.W.2d order County denying Milwaukee Circuit Court1 a motion *6 ("Betz") attorneys representing Randy the L. Betz to statutory attorney's recover fees from Diamond Jim's ("Diamond Jim's"). Auto Sales In this case we are to asked determine the plaintiffs may circumstances under which counsel re- statutory attorney's directly cover fees from a defen- knowledge approval, when, dant without counsel's or plaintiff and defendant enter into a settlement attorney's that not does address fees. attorney ¶ 3. Betz hired Milwaukee Vincent Me- gna ("Megna") represent dispute to him in his with Megna Diamond Jim's.2 filed a on lawsuit Betz's behalf fee-shifting During litigation, under two statutes. Betz and Diamond Jim's met and settled case attorneys' knowledge approval. their without or payment did settlement of reference Megna's statutory attorney's Subsequently, Megna fees. seeking filed a motion with the circuit court to recover statutory his fees from Jim's. Diamond The circuit Megna's appeals court denied motion. The court of citing public policy enforcing reversed, concerns with attorneys settlements made of "behind backs" in brought fee-shifting cases under statutes. argues
¶ 4. Diamond Jim's that the to re- statutory attorney's belonged Betz, cover fees to assign that did not his Betz to recover fees those presided. The Honorable Maxine A. White attorneys Scoptur, Several with law firm Aiken & S.C., including Megna, on case. All attor worked Betz's these neys statutory to attorney's seek recover fees from Diamond simplicity, only Jim's. For the sake of opinion this will refer to Megna. argues Megna. result, Diamond Jim's As a to directly from Diamond cannot recover fees argues public policy Further, Diamond Jim's Jim's. disputes, requiring encourages parties to settle fee-shifting to such settlements counsel's consent presents interest. a conflict of cases assign Megna argues statu- that Betz did his public attorney's tory right that the fees, and to recover underlying fee-shifting policy under- statutes would be fee-shifting cases if allowed to settle mined clients were statutory attorney's ensuring payment fees. without Megna involvement and further asserts that agreements fee-shifting cases consent to settlement to settlement. will not serve as barrier statutory right re- 6. We conclude that the belonged Betz, and that Betz did cover *7 Megna assign in to those fees to not his recover agreement. we conclude that Betz did their fee Because statutory attorney's assign fees not his to recover Megna, could to we must conclude that Diamond Jim's assignment. result, had notice of the As a we not have Megna may statutory attorney's not conclude that seek directly Jim's, Diamond and that the settle- fees from ment entered into between Diamond Jim's unambiguous, clear, and Betz is and enforceable. We appeals. therefore reverse the court of I. FACTUALBACKGROUND purchased 19, 2009, 7. On October Betz a 1999 paid from Diamond Betz Cadillac Escalade Jim's. including vehicle, title, $8,705.98 tax, for the sales following experi- months, fee. Betz license Over problems vehicle, Diamond Jim's enced with the which to address to Betz's satisfaction. was unable On 12, 2010, Betz hired February to Megna him in represent dispute his with Diamond Jim's. the fee agreement3 terms of between Betz Megna in relevant provided, part:
I any understand that I pay attorney do have to fees my attorneys money unless recover me in for this case. FEE SHIFTING 100.18,
I understand that Sec. Wis. Stats.,_is fee[-]shifting a I statute. This means if win at or trial my litigation, during settle case the defendant is usu- responsible ally my attorney paying for fees on based my attorney's I hourly rate. understand the Law of Megna my Offices Vince is accepting case with the agreement that it look pay- will to the defendant for attorney pursuant fee[-]shifting ment to provision once a lawsuit has been filed. TO
SETTLEMENT PRIOR LAWSUIT If a prior settlement is reached lawsuit being to a filed case, I my may understand the defendant not be responsible payment my attorney fees. In this event, the agrees charge Law of Vince Megna Offices rate flat fee of_. amount COSTS AND EXPENSES
I understand that the Law Vince Offices of will pay expenses. need my costs and In the event is case through my own, lost no fault of I understand that the *8 Megna bring [of] Law Offices Vince will not a claim against me expenses. for these costs and 3 The fee referenced Law "The Offices of Vince firm, Megna" have not Megna's than Scoptur. parties rather Aiken & any, distinction, if impact, addressed the of this we and ignore purposes therefore it for opinion. of this that accept I a settlement that if do
I understand my and case continues reasonable my attorneys deem immediately settlement, required to I will be without Megna for all costs Offices of Vince the Law reimburse and then be up point until expenses paid expenses as all further costs responsible pay become due. same
TERMINATION right to "termi- my attorney has the
I understand The Law Offices of Vince me as a client. nate" hourly done at its fees for the work be entitled to will my gross costs, exceed 33 of not to rate and its 1/3% recovery. my to terminate that I have
I understand so, responsible for However, I I will be attorneys. if do due on Megna fees and costs Offices of Vince the Law termination, my not to exceed 33 date of 1/3% recovery. gross omitted) (all in original). blanks
(bolding 2010, Betz sued Diamond March 9. On Court. Betz as Circuit County Jim's in Milwaukee contrary to Wis. advertising, serted claims for false fraudulent mis (2009-10),4 intentional § Stat. 100.18 dealership of automobile and violations representation In addi § Stat. 218.0116. contrary to Wis. regulations, Betz also damages, and punitive to compensatory tion Jim's fees" from Diamond "actual claimed 100.18(11)(b)2.5 and §§ statutes fee-shifting under Statutes are subsequent All references to Wisconsin otherwise indicated. the 2009-10 version unless 100.18(11)(b)2. in relevant provides, § Stat. Wisconsin part: Any suffering pecuniary person because of a violation loss any competent may any person court of other sue
this section *9 218.0163(2).6 17, May 2010, Megna, Betz, 10. On on behalf of §
made a settlement offer to Wis. pursuant Stat. 807.01. $10,750 offer The settlement in and sought damages $5,900 in fees. The offer stated the attorney's check for made fees should be attorney's payable Megna's firm. Diamond Jim's this offer rejected counsel. through 2010, September 28, 11. On counsel for Diamond Jim's made a counter-offer to settle the by repur- case vehicle and chasing $2,000 the towards Betz's paying Betz, rejected fees. on behalf of Megna, this offer. Betz and April On Thomas Letizia Jim's, of
("Letizia"), general manager the Diamond met the without counsel and settled case. The settlement part: relevant provided, Agreement purpose The of this is the Amicable Resolu- litigation, Action need for tion of the without the further relinquishment by parties any claim or each of of arising relating cause of action from or to the issues in Action, liability. and the release of all mutual Therefore, in of the mutual following consideration promises by the and releases made Parties as well as consideration, good other valuable the Parties to Agreement agree Agreement this entered that this is compromise disputed into as a of claims and does obligation of liability [sic] constitute or on whatsoever any parties respective behalf of the pursuant to the claims.
jurisdiction loss, pecuniary together shall recover with such costs, attorney fees,.... including reasonable 218.0163(2) provides, part: § Stat. Wisconsin in relevant Any buyer, suffering pecu- prospective retail lessee or lessee niary may loss because of a violation a licensee. . . recover damages any competent jurisdiction loss court costs, together including with reasonable fees. parties agree pursuant [sic] to solve action following specified terms:
A) and Auto James Letizia Diamond Jim's Pay Randy the agree
Sales to to L. Betz sum [$15,000] paid in form of check number 7114;
B) Randy hereby agrees that [his L. Betz suit
against Jim's] [s]hall Diamond be dis- missed. April 5, 2011, 13. On counsel for Diamond Jim's advising
learned of the settlement and drafted a letter Megna that the case was resolved. The letter referenced parties' agreement "confidential settlement" and stipulation included a draft to dismiss case. II. PROCEDURAL POSTURE April Megna 21, 2011, 14. On filed three mo- First, tions with the circuit court. asked the compel pay statutory circuit court to attorney's Diamond Jim's to 100.18(H).7 § pursuant fees to Wis. Stat. Megna argued attorney's that the to recover fees belonged lawyer under the statute to the and not the client, and that he and firm $16,808.50 his were owed at Megna requested the time of the Second, settlement. complaint leave to amend the and intervene as a plaintiff, arguing against that he had a cause of action Diamond Jim's for intentional interference with a con- relationship. Megna sought Third, tractual a court compelling order disclosure of the confidential settle- ment between Betz and Diamond Jim's. 7 While Betz's suit included claims under two different
fee-shifting statutes, 218.0163, §§ Wis. Stat. 100.18 and Megna's only § motion referenced 100.18. opposed Megna's
¶ 15. Diamond Jim's motions. argued statutory right Diamond Jim's that the to re- attorney's belonged cover to Betz, and that unambiguous a clear settlement was parties contract be between should enforced. parties Diamond Jim's asserted that the were entitled they settle the if chose, case without counsel and that 100.18(11) § recovery while Wis. Stat. allows for recovery it fees, does not mandate such a argued event of a settlement. Diamond also Jim's that the settlement should remain confiden- parties agreed tial unless disclose the terms. July granted Megna's 26, 2011, 16. On the court require motion to of the disclosure confidential settle- agreement. ment held The court all other motions in *11 abeyance days parties opportu- for 30 to allow the the nity negotiate attorney's a to settlement of the fee issue. August parties On 31, 2011, the disclosed to the court they dispute. that had failed to the resolve court briefing pending a then set schedule the motions. September ¶ 2011, 17. 30, On Diamond Jim's filed contract, a motion for reformation of the or alterna- tively, filing for rescission. The included an affidavit signed from Letizia he that he wherein stated when the agreement, the settlement he believed it resolved issue statutory attorney's argued Diamond fees. Jim's that agreement fact, did not, if the settlement in resolve the represent meeting issue, fee a the did the minds and should be reformed or rescinded.
¶ 8, 2011, the court On December circuit held hearing. a motion The court determined that the statu- tory right attorney's belonged recover fees to Betz attorneys. and not to his The court further concluded unambigu- clear, that the settlement was a binding Diamond Betz and contract between ous, and Megna's motions denied result, the court Jim's. As the case.8 dismissed Megna appealed.9 January 2012,
¶ 19. On argued Megna appeal, fee- that ¶ 20. On permit shifting claims Betz to settle his did not statute Megna knowledge Megna's asserted or consent. without belonged right fees under statute to collect that client, and that Diamond and not settling duty from without to refrain Jim's had a Megna's knowledge argued Megna further consent. or underlying fee-shifting policy public statutes that the permitted to settle if clients were be frustrated would fee-shifting addressing statutory cases without Megna argued attorney's Finally, it be that would fees. paying inequitable avoid Diamond Jim's to to allow statutory attorney's case. fees this argued Betz had a Jim's 21. Diamond not conditioned and that was to settle his claims attorney's knowledge Diamond Jim's or consent. on his properly on contract relied that the trial court asserted statutory resolving principles issue, and that equitable attorney's under cannot be awarded argued principles. Diamond Jim's further seeking client, Betz, his fees from should be Jim's. and not Diamond appeals 16, 2012, the court of 22. On October Betz, 2d circuit court. 344 Wis.
reversed the *12 denying in its December 8 order Although the court stated appealable, final and it did that the order was Megna's motion 9, dismissing January until enter an order suit 9 appealing indicated that he was Megna's appeal notice of 8, denying his December 2011 order from the circuit court's 9, dismissing motions, January 2012 order rather than the suit.
314 appeals The court of concluded that the settlement being agreement, despite unambiguous, clear and was contrary public policy because it was to the behind void fee-shifting appeals Id., ¶ 13. The statutes. court of pay- ordered Betz to return the settlement therefore ment and remanded the case to the circuit court for litigation. Id., ¶ 14. continued petitioned ¶ 23. Diamond Jim's this court for re- May granted view, 10, which we on
III. STANDARD OF REVIEW
interpretation
unambiguous
¶ 24. "The
of an
con
presents question
indepen
tract
a
of law for this court's
City
Dev., LLC,
dent
Bank v.
review." Town
Real Estate
134,
32,
340,
2010
2d
WI
330 Wis.
WI Castrovinci, 352, 358, 2d N.W.2d 115 Wis. 340 Shands v. (1983)). Fee-shifting "encourage[s] attorneys to 506 pecuniary in relation loss is small take cases where Storage, litigation." Inc., Pub. 2008 the cost of Cookv. App ¶ 426, 2d 645. 155, 85, 314 Wis. N.W.2d WI buyer fee-shifting [a a claim under "For the retail with may significant, litigation statute], the cost of the be recovery the stat . . . exceed the total under and even Kolupar, ¶ 258, 303 Wis. 2d 37. ute." transgres- effect of minor 27. "The cumulative yet they if considerable, would not be deterred sions is City Wayne, unavailable." Fletcher v. Fort fees were (7th 1998). Ind., "If the cost of 975, 162 F.3d Cir. recovery, litigation eliminates retail reduces or even likely rights buyers under will be less to enforce their Kolupar, 2d 258, the statute." 303 Wis. 37. Fee- shifting inflicting prevents "defendants from with thus people they wrong." impunity on the whom small losses Employees State Union Council Orth v. Wisconsin 2008). (7th 546 F.3d Cir. Fee-shifting attorneys statutes, and the who ensuring
represent cases, are thus vital to clients such rights are in court. The of consumers vindicated importance public policy of this is not a matter of debate. Additionally, attorneys represent
¶ who
cli-
fee-shifting
already
significant
take a
risk
ents
cases
they
they may
paid,
will not be
because
not "win"
Ordinarily,
only
"prevailing
case.
fees are awarded
to a
Pennsylvania
Valley
party."
e.g.,
See,
v. Del.
Citizens'
(1987).
Air,
Council
Clean
("Zeisler"), purchased a used car from Neese Motors ("Neese") using financing. dealer Id. at 1001. Zeisler unhappy became with the vehicle and contacted Attor- ("Barash") ney Barry represent Barash her in her dispute agreed accept with Neese. Id. Barash the case example, For only the record reflects that is one of attorneys a handful of in Wisconsin who takes automobile rights consumer cases. contingent neglected basis,
on a fee but to execute a fee Through Barash, with Zeisler. Id. Zeisler against Lending filed suit Neese under the Truth in §§ seq, fee-shifting Act, 15 U.S.C. 1601 et statute.11 Id. pending, ¶ 33. While the suit was Zeisler de- financing agreement Neese, faulted on her with repossessed provide Neese the car. Id. Neese offered to expensive different, Zeisler with a change less vehicle ex- for her to dismiss the lawsuit. Id. consulting agreed Barash, Without Zeisler to the settle- ment. Id. settlement made no reference to attorney's Id. The trial fees. court dismissed the suit objections. over Barash's Id. appeal
¶ 34. On the Seventh Circuit affirmed the statutory trial court. Id. The court concluded that the belonged to recover to the client *15 attorney, and not the and that the interests of the client by encouraging were served court, settlement. Id. The acknowledging policy the concerns then involved, ad- attorneys protect legitimate dressed how could their receiving payment: interest in lawyer himself, protect moreover, can though perfectly, by entering into a written contract with his client in assigns which the client statutory right his attorney's lawyer. fees to the lawyer Then the can right enforce the participation client, without the of his as in Samuels v. American Motors Corp., Sales 969 F.2d (7th 1992). 573, 576-77 Cir. If the client makes defendant, fees, settlement with the waiving attorney's and the defendant assignment has no notice of the —no notice, is, that the attorney's entitlement fees is plaintiffs not the lawyer go to waive—the can against 11The Truth In Lending provides Act that a creditor violating the statute is liable for "a attorney's reasonable fee as 1640(a)(3). § determined the court." 15 U.S.C. for breach of contract. If the defendant his client does assignment, lawyer go directly the can have notice of the Trust v. the defendant. Salem Co. Manufactur against Co., ers' Finance Production (1924); 264 U.S. (10th Co., Credit Ass'n v.Alamo Ranch 413, 417 989 F.2d 1993). Cir.
Id. at 1002. practically speaking, under Zeisler Thus, so
long lawyer as the written contract between the and the provides, payment client so attorney's counsel can seek Moreover,
fees from the client. when lawyer and the written contract between client assignment provides for a valid of the to recover attorney's may statutory pursue fees, counsel such fees long from the defendant so the defendant had as notice assignment. parties In if words, of the other enter private into a settlement without the involvement of provide statutory counsel, and the settlement fails to for attorney's may respon- fees,12the defendant be found only plaintiffs when the client sible fees assigned statutory attorney's his or her to recover had fees to defendant notice of the assignment. adopt posed Zeisler, standard, We as appropriate
as an framework to decide whether directly statutory attorney's can recover his from Diamond under these circumstances. Jim's "waiver," Zeisler Although the court the term we used *16 expressly in avoid that term our statement of the standard. This the "inten is because the term "waiver" under Wisconsin law is See, e.g., Brunton v. relinquishment right." tional of a known Corp., Nuvell Credit 50, 37, 135, 2010 WI 325 Wis. 2d 785 ¶ however, attorney's right be was not paid, N.W.2d 302. The to Zeisler, agreement in the in or in explicitly addressed settlement at case issue.
319 undisputed ¶ outset, 37. At the we note that it is Megna that neither nor counsel for Diamond Jim's was agreement April 4, involved the 2011 settlement with undisputed It Betz. is likewise settlement agreement between Betz and Diamond Jim's failed to provide payment Megna's attorney's for Thus, fees. presented, under the facts the crux of the matter before (1) Zeisler, court, as it is whether Betz was assigned statutory right his to recover fees to (2) Megna agreement, so, under the fee and if whether assignment Diamond Jim's had notice of the at the time of the settlement.
¶ 38. Given the fact that Betz and Diamond Jim's providing settled this case without counsel and without Megna's attorney's fees, we first address whether agreement provided assignment the fee for a valid statutory attorney's to recover fees from Betz Megna. assigned In order to determine whether Betz statutory attorney's his recover fees to agreement, under the fee we look to the fee construing A itself. fee is a contract. "When freely goal into, contracts that were entered our 'is to parties expressed ascertain the true intentions of the as language.'" Bank, the contractual Town 330 Wis. 2d (quoting 340, Journal/Sentinel, State ex rel. Inc. v. (1990)). Pleva, 704, 711, 155 Wis. 2d 456 N.W.2d359 ascertaining parties, "In the intent of the given plain ordinary contract terms should be their or meaning." Vlazny, 52, Huml v. 2006 WI " Wis. 2d 'If 716 N.W.2d807. the contract is unam- biguous, attempt parties' our to determine the intent ends contract, with four corners of the without Bank, consideration of extrinsic evidence.'" Town *17 (quoting Huml, 340, Wis. 2d 33 293 Wis. 2d 52). "Only ambiguous, meaning when the contract is susceptible interpre it to more than one reasonable is may beyond tation, court look the face of the contract and consider extrinsic evidence to resolve (citing Capital parties' Invs., intent." Id. Inc. v. White Packing Co., Inc., 178, 190, hall 91 Wis. 2d 280 N.W.2d (1979)). 254 Megna argues assigned
¶ 40. that Betz his statu- tory right attorney's to recover fees to under the agreement. Alternatively, Megna argues fee right that Betz's equitably
to fees should be recover subrogated Megna. Megna argues case, In to either right statutory attorney's relinquish Betz lacked the to against logic Zeisler, fees Diamond Jim's. Under the of Megna's argument unpersuasive. is assignment
¶ 41. "An is the 'manifestation of the assignor's right intention to transfer' a so that assignee acquires right by performance obligor." Co., Stilwell v.Am. Gen. Ins. 555 F.3d Life 2009) (7th (Second) (quoting of Cir. Restatement (1981)). § assign- Contracts "It is essential to an right obligee ment of a that the manifest an intention person transfer the to another without further obligee." action or manifestation intention (Second) (1981). § Restatement of Contracts No agreement such manifestation exists the fee at issue. ¶ 42. The terms of the fee indicate usually that Betz understood that "the defendant responsible is paying" attorney's in suits under fees § provided Wis. Stat. 100.18. The further attorneys that Betz's payment would "look to the defendant for pursuant shifting [-] to the fee qualified provision once a lawsuit has been filed." These fairly however, be as a statements, cannot characterized statutory assignment of Betz's to recover written *18 fees. provides
¶ 43. The fee further for a might pay number of where Betz have to circumstances Megna's example, himself. For if the for fees or costs prior filing lawsuit, had of the Betz case settled to pay Megna's have had to a flat rate for fees. would Similarly, if Betz had declined to settle the case on attorneys "deem[ed] reasonable," terms his he would immediately pay Megna's up had all of have to costs to point pay they that and continue to further costs as Finally, agreement provided if became due. attorneys attorney- either Betz or his terminated the relationship, responsible pay- client Betz would be ing Megna's provisions both fees and costs. These provide assign right evidence that Betz did not his to statutory attorney's agreement. fees to in the fee principles result, As a traditional of contract mili- law against finding assigned right tate that Betz his to statutory attorney's Megna. to fees Similarly, Megna's argument equi-
¶ 44. that Betz tably subrogated right statutory his to recover attorney's compelling. to counsel is not " 'Subrogation equitable
¶ 45. is an in doctrine unjust may properly voked to enrichment, avoid be applied person whenever other than a mere volunteer pays equity good a debt which in conscience should Servicing, be satisfied another.'" OcwenLoan LLC v. App Williams, 229, 7, 772, 2007 WI 305 Wis. 2d 741 (quoting Corp. N.W.2d474 Rock River Lumber v. Uni Mortg. Corp. Wis., versal 82 2d 240-41, Wis. 262 (1978)). permitted grant are "to Courts N.W.2d litigants equitable private remedies to situations explicit statutory authority no or in which there is remedy inadequate legal to do the available is which complete justice." E.C., 2d 376, 388, Breier v. 130 Wis. (1986); Mortg. Corp. see also GMAC 387 N.W.2d Gisvold, 459, 479-80, Pa. v. 215 Wis. 2d 572 N.W.2d (1998). presented issue, In case at we are with authority specific statutory grants the which attorney's plaintiff. fees to the Wis. Stat. recover 100.18(11)(b)2. § If to conclude that the client's we were statutory equitably to recover fees is subrogated retained, once counsel is clearly assign despite a fee that does right, legislature's explicit undermine the we would contrary. legislature to the has concluded directive *19 statutory that it is the client's to recover attorney's equitable principles espoused fees. The Megna trump language agreement do of the or not legislative directive. necessarily Additionally, Megna is not with- directly remedy if he is unable to recover from out payment from Betz Diamond Jim's. could seek agreement. equitable reasons, For these under their fee subrogation appropriate is not relief in the form of case. this agreement fee Further, to the extent this regarding Megna's right
could be deemed unclear statutory attorney's fees from Betz or Diamond recover attorney possesses Jim's, "the is on the who burden agreement legal knowledge to state and who drafts clearly agreement and to address the terms of the fee specifically the allocation of court-awarded Gorton, 508; fees." 2d 217 Wis. at see also Ziolkowski Grp., Mfg., Patent Solutions S.C. v. Dart Great Lakes App Inc., ¶11, 13, 2011 WI 331 Wis. 2d 794 N.W.2d (holding attorneys clearly have burden to legal agreements). draft their fee agreements ¶ 49. Given written fee are re- 20:1.5(c), quired, attorneys see SCR are cautioned to clearly agreement unambiguously draft a fee so that it assigns statutory right the client's to recover fees from the defendant under these circumstances. As public policy discussed, vital interests are at stake. agreement only protects ¶ 50. A clear fee attorney, protects but also the client and avoids conflict. clearly agreement A more drafted fee in the case at problem issue would have resolved the without necessity litigation. of additional Megna's
¶ 51. Because fee failed to clearly assignment secure an from Betz the case at remedy against issue, his Diamond Jim's is foreclosed. Finally, ¶ 52. because we conclude that the fee provide assignment does not for a valid statutory attorney's Betz's to recover fees to Megna, we conclude that the second Zeisler criterion assignment cannot be met. Because there was no be- Megna, tween Betz and Diamond Jim's could not know assignment. of the result, As a the Zeisler test is not regard inmet this either.
V CONCLUSION *20 statutory right ¶ 53. We conclude that the to attorney's belonged recover fees to and Betz, that Betz assign right Megna did not his to recover those fees to agreement. in their fee Because we conclude that Betz statutory attorney's assign his to recover did not Megna, conclude that Diamond Jim's fees to we must assignment. As a have had notice of could not may statutory conclude that not seek result, we directly Jim's, from Diamond and that agreement entered into between Dia- the settlement unambiguous, clear, and Betz is and en- mond Jim's appeals. the court of We therefore reverse forceable. appeals By the court the Court. The decision of is reversed.
¶ ROGGENSACK,J, did 54. PATIENCE DRAKE participate. (dissent- ¶ ABRAHAMSON,C.J. 55. SHIRLEY S. ing.) the court is the written The issue before whether Randy agreement Betz, client, fee between attorney, Megna, the client's transferred Vince attorney. majority statutory The fees to the purports apply principles opinion, ¶ 43, "traditional to decide the issue. It does not. of contract law" majority opinion interprets ¶ text of paragraphs, ¶¶ 41, in a scant three the fee authority, any analysis, proof, or 42, 43, without principles. resort to contract any analysis, proof, au- 57. At without interpretation,
thority, principles or use of of contract assignment majority opinion that an recites the rule pro- assignor's depends and then on the intention single "no such manifesta- in a sentence that nounces right] assignor's [of to transfer a tion intention Nothing more to in the fee at issue."1 exists analyze here. as majority opinion, of the reads The full text
follows: *21 any analysis, proof,
¶ ¶ 42, 58. At without au- thority, principles interpretation, or use of of contract majority opinion pronounces the that because the "FEE provision "qualified SHIFTING" has it statements" fairly assignment "cannot be characterized written as a statutory right of Betz's to fees." recover analysis, any proof, ¶ 43, 59. At without au- thority, principles interpretation, or use of of contract majority pronounces opinion parts the that of various agreement "provide[] the fee that for a of number might pay in which circumstances Betz have to Megna's "provide fees or costs himself' evidence that assign right statutory attorney's Betz did not his to agreement." to in the fee apply interpre- than Rather of contract rules majority opinion dutifully tation, some of which the majority opinion simply ipse recites, dixit, the decrees, language that the of the fee does not mean says. what it resolution This cannot be correct.2 The fee agreement unambiguously assigned right Betz's to Megna. fees to pronouncements assign- 61. This court's about beyond Assignments ments extend the instant case. are assignment "An assignor's is the 'manifestation of the intention to right assignee acquires right transfer' perfor- so the by Co., obligor." mance Stilwell v. Am. Gen. Ins. 555 F.3d Life (7th 2009) (Second) (quoting 577 Cir. Restatement of Con- (1981)). § assignment tracts "It is essential to an of a obligee an manifest intention to transfer to another person without further action or of manifestation intention (Second) (1981). obligee." § Restatement Contracts No such in manifestation exists the fee at issue. court, At the circuit the attorney moved to intervene make a claim against the defendant for tortious interference with agreement. the fee parties Neither the Inor address this or issue any potential against claim the may have the defendant. subject litigation this court. This frequently assignments court has considered other cases and contexts, each its own due to the particularities with of the case.3 each of Although circumstances these cases *22 slightly scenario, involves a different fact a central is the same —did the execute an effec- question parties assignment? tive
I 62. I of apply following principles contract law to the instant case. (Second) Contracts, The of Restatement re- by majority 41,
lied defines an upon opinion, ¶ as follows: "An is the assignment assignment 'manifes- tation intention to a assignor's right transfer' so of to assignee acquires performance by the obligor."4 Restatement does not require any par-
ticular formalities to be observed to make an effective
"No words of art are
to constitute
assignment.5
required
3See, e.g.,Anthony
65,
Gagliano
Openfirst,
& Co. v.
2014 WI
258,
2d
(disputing
355 Wis.
850 N.W.2d845
whether a transfer of
sublease);
property rights
assignment
constituted an
or a
Dow
56,
Family,
Mortgage Corp.,
LLC v. PHH
2014
2d
WI
354 Wis.
(disputing
assignment
a
an words that indicate an inten- assignee tion to make the of a claim are owner suffi- only assignment requires obligee cient."6 The that "the an intention transfer the to another manifest person further without action or manifestation of in- obligee."7 tention phrase ¶ 65. The intention" is "manifestation of concept
basic contract formation the Restatement (Second) phrase "adopts of Contracts. The an external objective interpreting conduct; or standard for it means expression distinguished the external of intention as from undisclosed intention."8 parties'
¶ 66. To determine the "manifestation apply well-accepted intention," the courts other rules interpretation: interpret contract "We a contract give meaning provision 'reasonable to each and without "9 rendering any portion superfluous.' writing "A is in- *23 terpreted interpreted as a "are whole"10 words light principal the purpose of all the and if the circumstances, parties given great
of the is ascertainable it is weight."11 scope agreements
¶ 67. "Because the
of retainer
attorney
attorney
varies from
case,"
case to
inquiries
meaning
about the
a of
retainer and fee
intention if he believes or has reason
promisee
to believe
conduct.").
will infer that intention from his
or
words
6
(4th
Lord,
§
29 Richard
Williston on Contracts
74:3
ed.
2003).
7
(Second)
(1981)
§
Restatement
of
324
(empha
Contracts
added).
sis
8
(Second)
2,§
Restatement
cmt.
Contracts
b.
9
Inc.,
Sonday
Agency,
92,
21,
v. Dave Kohel
2006 WI
293
(internal
458, 471,
Wis. 2d
quotation
328 allocation between an and a client necessarily "are fact intensive."12 meaning given "depends 68. The to words to a varying prior experi- extent on the context and on the parties."13 ence of the In words, other the essence of the meaning of the words of a contract is found in how a person having reasonable would understand terms, in mind the context of the transaction. Our courts interpret give contracts to them "common sense"14and meaning. "realistic"15 ambiguity,
¶ 69. When there is an
the courts look
parties'
to extrinsic evidence to resolve the
intent.16
par-
Extrinsic evidence can include the conduct of the
negotiations
ties, their
before and after the execution of
the documents, the acts and deeds in connection with
surrounding circumstances, and their words.17
12
Hostak,
Pichler, S.C.,
Gorton v.
Henzl &
493,
217 Wis. 2d
(1998).
505,
¶ agreement. the full text of the the fee agreement give is not text the fee at issue 72. The ¶ in plain It is from a form book. written legal derived that be commended.18 a should English, practice mean- agreement, giving The text of the fee to the text read separately to each ing provision manifests an intention whole, clearly plain read as a will look to the defendant attorney English circumstances, and to the client fees in some attorney in other circumstances. The circuit court interpreted I The circuit court declared:
as do. fee-shifting provision addresses with whom the attorney It to collect fees vests. transfers
authority
Attorney Megna.
provides
It
from Betz to
authority
Attorney Megna with the
to seek
the Defendant
if Betz succeeds with his Wis.
fees from
during
§
at
or
with
Stat.
100.18 claim trial
settlement
18
Enters.,
See,
Inc.,
76,
e.g., Yauger Skiing
v.
2d
87
Wis.
(1996)
n.2,
(noting
negligence
waivers in
&
The circuit court was correct. agreement support 75. The words of the itself interpretation.
this agreement parts, 76. The is divided into several capitalized heading preceding with a bold-faced, each part. part agreement explains Each of the fee attorney particular allocation of fees under a set of circumstances. headings descriptive
¶ 77. The are of four various circumstances under which are fees to allocated: "FEE SHIFTING," "SETTLEMENT PRIOR TO LAW- SUIT," "COSTS EXPENSES," AND and "TERMI- purpose agreement NATION." The of this is to estab- pays attorney's lish when the client fees, and when pays attorney's the defendant fees.
¶ 78. The words that manifest an intention to give attorney to collect fees are part agreement in the explicitly labeled "FEE SHIFTING." The explic-
uses the words "FEE SHIFTING" itly attorney shifting refers to the fee statute, Wis. Stat. § 100.18. heading 79. The states under the following:
"FEE SHIFTING" the FEE SHIFTING 100.18,
I understand that Sec. Wis. Stats.,_is a shifting fee statute. This if I means win at trial or settle my during litigation, case usually the defendant is responsible paying my attorney for my fees based on attorney's hourly rate. I understand the Law Offices of Vince accepting my is case with the it will pay- look to the defendant pursuant shifting ment of to the fee provision (emphasis once lawsuit has been filed added). *26 provision unquali- ¶ "FEE 80. The SHIFTING" fiedly attorney states the under circumstances which the attorney pursue will the fees from the defendant: In exchange case, for the law firm's to take the attorney agree attorney the client and that the "will look payment attorney pursuant to the defendant for fees shifting provision to the fee once a lawsuit has been filed" added). (emphasis provision
¶ 81. The "FEE SHIFTING" states usually responsible paying that the defendant is for the attorney client's fees and that the "will" pursue attorney defendant, the fees from not that the may Obviously, attorney or could do so. the cannot look statutory attorney's to the defendant for fees unless the agrees belong attorney client that the fees to the By signing agreement, not the client. the client agrees arrangement. to this language
¶ 82. The in the "FEE SHIFTING" provision plain English, states, in the basic terms of the (assignment) statutory litiga- transfer of a fee award lawyer tion from the client to the all meets requirements assignment: of an
(cid:127) Who statutory is entitled to fees? The client. (cid:127) gets statutory attorney. Who fees? (cid:127) attorney being What fees are "[P]ay- transferred? attorney
ment of pursuant fee-shifting to the statute a once lawsuit has been filed." (cid:127) Is there additional action or manifestation of inten- required by
tion the client? No. majority opinion, ¶ 83. The 42, dismisses the provision "qualified "FEE SHIFTING" as statements" fairly assignment that "cannot be characterized as an statutory right Majority op., Betz's to recover fees." Notably, majority opinion 42.19 does not offer "qualify" which words the last sentence, which states exchange taking that in for case, will pursue attorney fees from the defendant. provide qualifier key 84. Unable to for the last provision,
sentence of the "FEE SHIFTING" the ma- jority opinion, ¶ 42, instead focuses on the word "usu- ally" in the second sentence, which states that if there is litigation, usually responsible "the defendant is paying my attorney my attorney's hourly fees based on added). (emphasis rate" "usually"
¶ 85. The word in the second sentence is *27 non-legalese a correct statement of the Alaw. court usually plaintiffs holds the defendant liable for the attorney attorney's hourly fees based on the rate as agreement. always stated in the fee But courts do not do so. problem agreement
¶ 86. The real the fee in faces majority opinion is that the text of the "FEE provision typical SHIFTING" is not in the formalistic assignment language majority expects. It does not
19 majority opinion reads at 42¶ as follows: The terms of the fee indicate that Betz understood that usually responsible paying" attorney's "the defendant is for fees in § suits under provided Wis. Stat. 100.18. The further attorneys payment that Betz's would "look to the defendant for of pursuant fee[-]shifting provision to the once a qualified statements, however, lawsuit has been filed." These fairly assignment cannot be characterized as a written of Betz's statutory right to recover fees. assign- boilerplate generic legalese forms of use the "assign" jargon legal of or it use the ments, nor does "transfer." plain speech."20 profession "[0]ur disdains agree-
Judges probably understand the better would in traditional case if it were drafted ment in the instant guides language legal legalese assignment in used form something following: like read received, I, exchange _, In for value and transfer to assignor, assign as _[address], assignee, as _, _[address], assigns, for as- assignee's legal representatives ,21 benefit, any all... use and signee and their probably contrast, better un- In the client Attorney Megna plain English version derstands Megna, gets client, used, states that which litigation. statutory fees from the defendant majority opinion ignores the rule of 89. The particular magic interpretation are no words assign. Instead, the manifest an intention to needed to majority opinion message attorneys who sends a fee-shifting represent statutes clients cases where (7th 2007). Collins, 697, 699 Cir. United States v. 510 F.3d (updated § Jay Grenig, Legal Forms 8:24 E. Wisconsin Westlaw). 2014) (available on case, Attorney's Guaranty Title Fund v. In another recent 28, Bank, 355 Wis. 2d 850 N.W.2d Town 2014 WI listing of assignment language was used after a detailed similar legal malpractice various claims: *28 therefore, assignor] [the [the to induce to loan Now order $195,000.00, pursuant provisions assignee] the of a certain to .., assignor] hereby assigns Mortgage [the . and transfers his Note proceeds resulting from each of the above interest in. . . the assignee] together [the successors and described Claims to with its assigns .... apply: legalese, plain English. majority not use The opinion attorneys seems to endorse who use le- the galese assignment, version of in which the client "in exchange hereby assigns consideration, for valuable pursue attorney's pur- to fees, transfers the [attorney] [address] [statute], suant to to of and all [attorney's] legal assigns and heirs" and so forth. majority opinion ignores The the rule of interpretation requires give us to reasonable meaning to each word of the contract. What reasonable meaning provision does the "FEE SHIFTING" if have assignment rights legal it is an of to fees in the majority opinion event of lawsuit? The this renders language meaningless superfluous. provisions agreement sup-
¶ 91. Other of fee the port interpreting provision "FEE the SHIFTING" as assigning to the the to collect litigation. fees from the defendant if there is agreement repeatedly attorney, treats the not the cli- by attorneys paid ent, as the owner the of fees the shifting defendant and under awarded the fee statute litigation example, following: See, when ensues. for the (cid:127) client] of [the understand that the Law Offices Megna charge
Vince will the side other its current charged rates are then at time of request payment of (Emphasis ["HOURLY RATE"] its fees. added.) (cid:127) paid In addition to all other to Law Offices side, Megna agree pay Vince other I
of Megna of ["ADDITIONAL Law Offices Vince .... added.) (Emphasis RECOVERY"] (cid:127) In paid addition to all other fees to the Law Offices side, Megna by agree pay Vince other I any punitive Law Offices of Vince 40% *29 recovered, through settlement
damages whether (Empha- DAMAGES"] judgment. ["PUNITIVE or added.) sis (cid:127) being prior to a lawsuit is reached If a settlement responsible for may not be the defendant
filed.. . event, In the Law my attorney fees. this payment of rate fee charge a flat agrees ... to Offices blank] [left _of in the amount LAWSUIT"] PRIOR TO ["SETTLEMENT treats instance, agreement In each 92. ¶ to of the client, right as the holder not the attorney, the defendant. fees attorney's paid various fee sets forth The fee majority The circumstances. differing under allocations fee allocation for provisions these asserts opinion evi- "provide than litigation other under circumstances statutory his to assign right Betz did not dence that Majority in the fee agreement." to attorney's Megna fees 43.22 op., ¶ I cannot say, does not majority 94. The to fees or pay Betz out, requiring awhy provision
figure at 43 as follows: majority opinion reads provides for a number of circumstances further The fee Megna's might pay or costs himself. For have to for fees where Betz lawsuit, filing prior example, to the if the case had settled Megna's Similarly, pay rate for fees. have had to a flat Betz would attorneys terms his to settle the case on if Betz had declined immediately reasonable," pay all of he would have had to "deemfed] pay point further as Megna's up and continue to costs costs to that Finally, agreement provided if either they due. become attorney-client relationship, attorneys terminated Betz or his Megna's responsible paying fees and costs. both Betz would he assign provide his provisions that Betz did not evidence These agreement. statutory attorney's fee As right fees to to against result, principles contract law militate traditional statutory to finding assigned his that Betz Megna. (for example, costs under certain circumstances if no filed) "principles lawsuit were means that of contract law against finding assigned militate that Betz his statutory attorney's Megna." Majority op., ¶ fees to *30 assignment attorney
¶ 95. The of thus is assignment effective under certain circumstances; the play does not come into should certain other circum- pass. nothing come stances There is unusual about arrangement. this
¶ conclude, I as did the court, circuit that the provision text of the "FEE SHIFTING" and the text of the aas whole demonstrate a manifest assign legal intention to the claim to fees under Wis. § attorney litigation. Stat. 100.18 to the in the event of
Ill interpretation only by supported ¶ 97. This is by the but text also the in context which fee the operates, namely was executed and the allowing Wisconsin lemon law claims for defective cars § governing misrepresen- and Wis. Stat. 100.18 suits for interpreted light in tation. Words a contract in "are the principal purpose circumstances, of all the and if the of parties given great weight."23 the is ascertainable it is purchase, purchase,
¶
A98.
car
next to a home
is
largest single expenditure many people.
of
aWhen
purchases
consumer
car,
defective
the lemon law
§
designed
give
and
statutes Wis. Stat. 100.18 are
remedy.
fee-shifting
consumer a
Both statutes are
stat-
modify
regarding
pays
utes that
the American rule
who
attorney.24 Ordinarily
in the United
States
23
(Second)
(1).
§
Restatement
of Contracts
Inc.,
Cook
Storage,
App 155,
See
v. Pub.
2008 WI
314 Wis. 2d
prevailing fees from the collect does not relatively plaintiffs party.25 opposing in small- Thus cannot afford to consumer cases often dollar-amount attorney pay they fees. if have to incur seek relief § address this fact Stat. 100.18 The lemon law and Wis. life of governed and Wis. In the lemon law cases § (explicitly in the "FEE referenced 100.18 Stat. payment plaintiffs provision), for the SHIFTING" plaintiff defendant. to the fees shifts from pub- legislature expressed vital has this 100. The shifting favoring policy in lemon law fee lic state rights misrepresentation to ensure the cases attorneys "Fee-shifting statutes, and the consumers: represent cases, are thus vital to clients such who rights ensuring are vindicated that the of consumers court."27 *31 Attorney Megna
¶ as, out and holds himself 101. attorneys in who as, one of the few Wisconsin is known lemon cases.28 takes law agree-
¶ the context in which the fee 102. This is majority opin- Indeed, the executed. ment at issue was importance legis- ¶¶ that the ion, 26-29, discusses the fee-shifting enforcing given statutes in lature has to the consumer-protection in laws at issue the instant the case. majority acknowledges, opinion
¶ 103. The rightly be to so, the defendant should not able 25 12, 28, Hosp., v. Beloit Mem'l 2d 483 Winkleman 168 Wis. (1992). 211 N.W.2d See majority op., 26-29. ¶¶ added). Majority op., (emphasis 28 ¶ ("For See majority example, n.10 the record op., 29¶ only attorneys in Megna is one of a handful of reflects cases."). rights automobile consumer Wisconsin who takes fee-shifting public policy by the circumvent statute’s attorneys cutting ability of out their to collect through unfettered out-of-court settlement: recognize important While we the aof client to settle, if a an client has unfettered to settle without fee-shifting counsel's involvement when a statute is implicated, qualified attorneys otherwise bewill discour- from aged practicing vitally important in this area of law. Majority op., agree majority opinion's ¶ I29. with the analysis legislature's public policy. of the mandated Why majority opinion
¶ ignore 104. then does the legislative public policy deciding the declaration of majority opinion say. the instant case? The does not apply sum, 105. In when I rules contract interpretation, I conclude that the text context of agree- fee entire demonstrate that the assigned statutory ment fees from the client attorney in the circumstances listed the "FEE provision, namely litigation. SHIFTING"
IV regarding A few other matters contract interpretation emerge majority opinion. in the majority truly opinion end, In the never competing whether decides there are reasonable inter- pretations agreement requiring the fee court to look beyond interpret the four corners of the contract its meaning. majority opinion Instead, waffles. *32 majority opinion
¶ On one hand, 108. the the can interpreted agreement treating unambigu- be as the as looking only any citing ous, to the text never par- to extrinsic evidence determine the intent of the ties.
339 opinion majority ¶ hand, the 109. the other On potentially agreement the on "unclear" the fee as views Majority attorney's assignment subject fees. of the op., ¶ 48. agreement the inten-
¶ "unclear," fee is 110. If the question parties of fact to be determined the is a tion of by being presented extrinsic fact after with the finder of evidence. recognize for
¶ the fee 111. I would unambiguous assignment of the is, it an what Attorney attorney's Megna. Betz to fees from majority appar- opinion ¶ Furthermore, the agree- ently discussion, that fee assumes, without integrated an contract. ment is complete ¶ its face not 113. Yet this contract on is fully integrated. in not There is a blank and therefore is agreement that filled in. The amount the fee is not Attorney Megna charge client the "SETTLE- will provision left blank. TO is MENT PRIOR LAWSUIT" ¶ a matter 114. A on material blank contract fully integrated and indicates that the contract is may used to understand that extrinsic evidence be parties. intention of the looking evidence, than Rather extrinsic interpretation rules
as dictated our of contract non-integrated majority opin contracts, or unclear "to state ion that the burden is on asserts clearly address of the fee and to the terms specifically allocation of court-awarded Majority op., (quoting Hostak, 48 Gorton v. fees." Pichler, S.C., 493, N.W.2d & 2d Henzl Wis. (1998) Grp., citing Patent Ziolkowski Solutions Mfg., App Inc., v. Lakes Dart 2011 WI S.C. Great 253). 230, 794 13, 331 2d N.W.2d Wis. *33 agreement case, 116. In the Gorton the fee was contingent agreement. agreement fee The fee was regarding attorney silent the allocation reasonable § Statutory attorney fees under Wis. Stat. 100.18. fees were awarded. The Gorton court held that the distribu- statutory attorney governed tion of the fee award was parties.29 contingent the contract between the The agreement specifically" fee in Gorton did not "address statutory attorney's the fees, allocation of the and attorney statutory did not receive fees. contrast, In in the instant case the "FEE provision exactly agree-
SHIFTING" does the what fee agreement ment in Gorton did not fee do—the at issue specifically statutory the addresses allocation of attor- ney fees. dispute
¶ 118. Furthermore, in Gorton the about statutory attorney pursu- who was entitled to the agreement attorney ant to the fee between the the and attorney client was between the and the client. attorney and client were adversaries. To the extent agreement attorney the between and client specifically did Gorton not address the allocation of statutory attorney attorney, obviously fees, the who had legal expertise, drafted the and had lost. who dispute ¶ 119. In case, the instant no exists be- (Betz) attorney (Megna) tween the that, and the client pursuant agreement, attorney, to their fee any statutory attorney client, has the fees.30 dispute The statutory attorney in the instant is case about who entitled to Megna,
fees is between Betz's as attorney, potential payor as Jim's, Diamond
29Gorton, 2d at Wis. 30Megna represent continues to Betz has averred he plans has made no claim and to make claim against no his client. Thus, the rule stated fees. attorney statutory in a of a fee interpretation
Gorton governing does not apply and client between dispute *34 case. in the present the fee agreement The interpretation is, unfortunately, opinion majority
proposed different fronts. many too on troubling I I dissent. reasons, foregoing 121. For court to determine to the circuit the case remand would of the assignment. had notice defendant whether *35 342-A *36 342-B