Nelson v. MacHut

138 Wis. 2d 301 (1987) 405 N.W.2d 776

Douglas NELSON, Plaintiff-Appellant,
v.
Gary MACHUT, Defendant-Respondent.

No. 84-1136.

Court of Appeals of Wisconsin.

Submitted on briefs November 12, 1986. Decided March 26, 1987.

For the plaintiff-appellant the cause was submitted on the briefs of Douglas Nelson, pro se, of Las Vegas, Nevada.

For the defendant-respondent the cause was submitted on the brief of Linda M. Clifford and La Follette, Sinykin, Anderson & Munson, of Madison.

Before Gartzke, P.J., Eich and Myse, JJ.

EICH, J.

Douglas Nelson appeals from a judgment assessing attorney fees against him pursuant to the "frivolous action" statute, sec. 814.025, Stats. The issues are: (1) whether the testimony of an attorney expert witness as to the reasonableness of the fees charged must be disregarded because his office is not in the county in which the action arose; (2) whether the trial court erred in determining that Machut's total fees for defending the action were reasonable; (3) whether the fact that Machut prevailed on only one of two alternative grounds stated in his motion to dismiss requires the court to apportion the award of fees; (4) whether Nelson's appeal is itself frivolous, in whole or in part; and (5) whether Nelson should be assessed double costs for failing to comply with the Rules of Appellate Procedure.

We conclude that the expert witness was competent to testify despite his out-of-county residence, and that the trial court did not abuse its discretion in ruling on the reasonableness of the fees. We also conclude that the court was not required to apportion the fees as a result of its decision on Machut's motions, and that Nelson's appeal is frivolous. Finally, we assess double costs against Nelson for violating the Rules of Appellate Procedure.

The facts are not in dispute. Nelson sued Machut for defamation, and the case lay dormant for several years. Machut then filed three motions: a motion for judgment on the pleadings based on the privileged nature of the alleged defamatory communication; a motion for attorney fees under sec. 814.025, Stats., and a motion to dismiss for failure to prosecute. After receiving briefs, the trial court granted the first two motions and denied the third. The court then proceeded to assess fees against Nelson without further hearing, and Nelson appealed. We affirmed the trial court's rulings on the motion for judgment on the pleadings and on the frivolousness of the action, but we remanded with directions to determine the reasonableness of the fees. The trial court held further hearings and made the award which is the subject of this appeal. Other facts will be discussed below.

I. EXPERT WITNESS

Machut's expert witness on the reasonableness of his attorney fees was a lawyer from another county. Nelson argues, without citing any authority, that "[i]t is the law in Wisconsin and elsewhere that [such a witness must] be an attorney practicing in the county where he is asked so to testify." Because it is undisputed that the witness had practiced in Dane County, the only basis for Nelson's challenge must be that the witness has no office in the county. The argument is without merit.

[1]

The witness was competent to give his opinion. A trial lawyer experienced in defamation actions, he was president-elect of the State Bar of Wisconsin and had a statewide practice. He had practiced in Dane County, and was "very familiar" with both the standards of practice and attorneys' billing practices in the county. The witness's competency to give expert testimony was established beyond question.

II. REASONABLENESS OF THE FEE

Section 814.025(1), Stats., provides that if an action is found to be frivolous, as that term is defined in the statute, the court "shall award to the successful party costs ... and reasonable attorney fees." In Standard Theatres v. Transportation Dept., 118 Wis. 2d 730, 747, 349 N.W.2d 661, 671 (1984), the supreme court stated that a trial court's valuation of attorney fees "will be sustained unless there is an abuse of discretion." Once the facts are found, however, reasonableness is usually a question of law. Wassenaar v. Panos, 111 Wis. 2d 518, 525, 331 N.W.2d 357, 361 (1983). But where the question is the reasonableness of attorney fees, we have recognized an alternative approach. We view the question as one of law, but give weight to the trial court's determination. State Bank of Hartland v. Arndt, 129 Wis. 2d 411, 423 n. 3, 385 N.W.2d 219, 225 (Ct. App. 1986). This approach is consistent with the court's discussion of trial court deference in Standard Theatres:

We believe that the trial court is in an advantageous position to make a determination as to the reasonableness of a firm's rates. This is because the trial court may be aware of the costs incurred by a firm in managing its legal practice, or is capable of asking to be made aware of them. As this court noted in Tesch v. Tesch, 63 Wis. 2d 320, 335, 217 N.W.2d 647 [, 654] (1974).

"[The trial judge] has observed the quality of the services rendered and has access to the file in the case to see all of the work which has gone into the action from its inception. He has the expertise to evaluate the reasonableness of the fees with regard to the services rendered." Id., 118 Wis. 2d at 747, 349 N.W.2d at 671.

[2]

Nelson argues that there was no evidence from which the trial court could conclude that the fees were reasonable. We disagree. The case was tried by Attorney Linda Clifford, then an associate in a Madison law firm. Clifford's work was closely supervised on a near-daily basis by Attorney Brady Williamson, a firm partner with extensive experience in the trial of defamation cases. Williamson reviewed all of Clifford's time slips and every pleading, motion paper and brief, and he reviewed and adjusted all client billings. He discussed the factors that went into determining the amount of Machut's bills, and stated that in his opinion the charges were reasonable. All of the time slips, bills and written narrative summaries of the work done for Machut were received in evidence without objection, and Nelson's cross-examination revealed little more than that Williamson did not actually watch Clifford work on the case to see whether she was keeping accurate time records.

Attorney Gregory Conway was Machut's expert witness, and his qualifications have already been discussed. Conway testified that the charges to Machut were reasonable, if somewhat on the low side. He based his opinion on his knowledge and experience, and his review of the files in the case. Nelson's cross-examination was essentially limited to establishing that Conway had no actual knowledge that Clifford's and Williamson's billed hours were accurately or honestly reported, and that he could not say whether a charge of $1.96 for a single telephone call was actually charged by the telephone company, and, if so, whether the company's rates were themselves reasonable.

Nelson himself was his only witness, and he testified briefly. He is an attorney who had served for a time as a small claims judge, and had practiced in Madison for some fifty years. In Nelson's view, Clifford's and Williamson's charges were unreasonable. In support of his opinion, he filed affidavits stating that he had been able to read a legal file and several cases and texts in less time than that billed by Clifford for similar work.

The trial court, after considering the evidence and reviewing the case file, concluded that the fees charged to Machut were "more than reasonable" in light of the unusually large number of motions and briefs filed by Nelson and considering also Williamson's and Clifford's professional skills, experience and standing in the legal profession. The trial court considered appropriate factors and we see no error in its determination that the fees were reasonable.

III. APPORTIONMENT

Nelson points out that the trial court's award represents Machut's attorney fees for all work done on the case, and he contends that because their "failure to prosecute" argument was not accepted by the court, he should not be liable for any fees relating to that aspect of the case. However, all of Nelson's claims were found to be frivolous; and on this record we see no need to apportion the fees.

In some cases, apportionment between frivolous and nonfrivolous claims is appropriate:

Although there is no express authority in sec. 814.025, Stats., to separately consider the frivolousness of various claims which constitute an action, we conclude that a reasonable and sensible reading of the statute requires such an approach. To conclude otherwise would frustrate the obvious purpose of the statute. Were we to accept the Stolls' argument, a party could assert a marginally meritorious claim and numerous frivolous claims but yet avoid the statute's sanctions. This interpretation is unreasonable because it allows for the very abuse of the judicial system that the statute seeks to prevent. Unreasonable and absurd consequences in the application of the statute are to be avoided even where the language of the statute conveys a plain meaning.

A more reasonable interpretation allows the trial court to determine the frivolousness of the various claims constituting an action or a defense. The purpose of sec. 814.025, Stats., is thereby fulfilled. We therefore agree with the trial court's determination that it could properly find some claims within an action frivolous and some not frivolous. [Citations omitted.] Stoll v. Adriansen, 122 Wis. 2d 503, 511-12, 362 N.W.2d 182, 187 (Ct. App. 1984)

In this case, Machut's motion, in addition to seeking frivolous action costs, sought dismissal of the action on alternative grounds that: (1) it was legally meritless because the allegedly defamatory statement was absolutely privileged; and (2) Nelson had failed to prosecute the action for five years. The trial court's memorandum decision focused on the first issue and, after a reasoned discussion of the facts and law, ruled in Machut's favor. In response to the claim of lack of prosecution, the court simply noted that because Nelson had, on several occasions, requested that the action be advanced on the calendar, there was no failure to prosecute. This comment appears in the middle of a lengthy opinion, and because Machut's trial briefs are not part of the record, we do not know what efforts may have been expended by his counsel on this aspect of the motion. We need not pursue the point, however, for we do not believe the apportionment requirement of Stoll applies to the facts of this case.

Machut's three-part motion was a response to a frivolous lawsuit. It sought dismissal on two alternative grounds and it requested fees under sec. 814.025, Stats. As indicated, the trial court dismissed the action on only one of the two grounds advanced—the ground that really was the primary basis of the motion—and agreed that the action was frivolous. We affirmed both rulings.

[3]

The fact that Nelson's action may not have been subject to dismissal for lack of prosecution has nothing to do with whether it was frivolous. All legal claims advanced by Nelson in his lawsuit were held to be frivolous, and they do not become any less so because the trial court based its decision to dismiss on one of two alternative grounds put forth by Machut.

IV. FRIVOLOUS APPEAL

We may assess fees and costs on appeal in two circumstances under sec. (Rule) 809.25(3)(c), Stats.

1. The appeal or cross-appeal was filed, used or continued in bad faith, solely for purposes of harassing or maliciously injuring another [or]

2. The party or the party's attorney knew, or should have known, that the appeal or cross-appeal was without any reasonable basis in law or equity and could not be supported by a good faith. argument for an extension, modification or reversal of existing law.

Nelson, an attorney of many years' standing, should have known that there was no reasonable basis for the appeal. The "abuse of discretion" standard of review of trial court decisions is well-known, and is difficult to overcome in the best of cases. Here, the testimony of Williamson and Conway was extensive and to the point. Nelson's cross-examination of both witnesses was cursory, and he voiced no objection to the admission of Machut's documentary evidence. His evidence was limited to a brief statement of his own opinion that the fees were unreasonable. The sole support for that opinion consists of two affidavits in which Nelson states his feeling that Clifford should have spent less time on some of the work she billed to Machut. In addition, Nelson's unsupported argument on Conway's competence to testify, and his assertions that the award should some how be apportioned because the trial court did not adopt every legal argument advanced by Machut to defeat the action, have no basis in law; and his failure to cite authorities to back up these propositions is further evidence of their lack of reasonable merit.

Machut asks for double costs under sec. (Rule) 809.83(2), Stats., for failure to comply with the Rules of Appellate Procedure. He asserts that: Nelson filed his appendix more than three weeks after his brief, in violation of secs. (Rules) 809.19(1) and (2); he failed to include in his initial brief a statement on argument and publication in violation of sec. (Rule) 809.19(1)(c); and he failed to follow the Uniform System of Citation in violation of sec. (Rule) 809.19(1)(e). Machut also claims that Nelson failed to paginate his appendix or include crucial damaging testimony, requiring Machut to prepare and file a supplemental appendix. Nelson does not dispute these violations and, because of their number, we believe they are deserving of sanction.

[4, 5]

We conclude, therefore, that Nelson's appeal was frivolous in its entirety within the meaning of sec. (Rule) 809.25(3), Stats. We also conclude that Nelson should be subject to the sanctions of sec. (Rule) 809.83(2) for multiple violations of the Rules of Appellate Procedure, and we therefore award respondent double costs on the appeal. We remand to the trial court for a determination of the fees and costs to be awarded.

By the Court.—Judgment affirmed and cause remanded for further proceedings consistent with this opinion.