Kohner Mann & Kailas SC v. Metallurgical Associates, Inc.

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
May 19, 2020
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.
Appeal No. 2019AP458 Cir. Ct. No. 2015CV6012
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT I
IN RE THE DENIAL AND FINDING OF CONTEMPT IN: KOHNER MANN & KAILAS
SC V. METALLURGICAL ASSOCIATES, INC.:
KOHNER MANN & KAILAS SC,
PLAINTIFF-THIRD-PARTY
PLAINTIFF-RESPONDENT,
V.
METALLURGICAL ASSOCIATES, INC. AND KAREN L. HUTCHINSON,
DEFENDANTS,
ROBERT J. HUTCHINSON,
DEFENDANT-APPELLANT,
THE NORTH RIVER INSURANCE CO. C/O DAVID ARMSTRONG, REG. AGT.,
THIRD-PARTY DEFENDANT-RESPONDENT,
NISTLER LAW OFFICE,
THIRD-PARTY DEFENDANT.
No. 2019AP458
APPEAL from an order of the circuit court for Milwaukee County:
ELLEN R. BROSTROM, Judge. Affirmed.
¶1 DONALD, J.1 Robert J. Hutchinson, pro se, appeals an order of the
circuit court denying his motion for contempt against Kohner Mann & Kailas SC,
and The North River Insurance Co. (collectively, KMK), granting KMK’s motion
for contempt against Robert Hutchinson, and barring Robert2 from filing
additional motions relating to the case underlying this appeal.3 We affirm.
BACKGROUND
¶2 This case has a long procedural history. The facts relevant to this
appeal are as follows. In March 2013, Robert and his wife Karen retained KMK, a
law firm, to represent them and their company, Metallurgical Associates, Inc.
(MAI), in a contract dispute with a former business partner. KMK ultimately
withdrew as the Hutchinsons’ counsel after KMK expressed concern about the
Hutchinsons’ ethical behavior while clients. When KMK withdrew as the
Hutchinsons’ counsel, it had incurred $119,424.08 in legal services that the
Hutchinsons had not paid.
¶3 KMK filed the action underlying this appeal against the Hutchinsons
to recover its legal fees. The Hutchinsons and their company filed a counterclaim,
alleging that KMK’s representation fell below the requisite standard of care and
1
This appeal is decided by one judge pursuant to WIS. STAT. § 752.31(2)(h) (2017-18).
All references to the Wisconsin Statutes are to the 2017-18 version unless otherwise noted.
2
Because Robert J. Hutchinsons’s wife, Karen L. Hutchinson, was also a party earlier in
the proceedings, we refer to Robert by his first name.
3
KMK also filed a motion for frivolous costs against Robert. We deny that motion.
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No. 2019AP458
that KMK breached its duty of representation to the Hutchinsons. Ultimately,
KMK moved for summary judgment seeking dismissal of the Hutchinsons’
counterclaim and judgment against the Hutchinsons for the legal expenses
incurred when it represented the Hutchinsons. The circuit court granted KMK’s
motion.
¶4 Robert4 appealed the order granting summary judgment and
dismissing his counterclaim. This court dismissed the appeal as untimely. Robert
then filed a motion for relief from judgment, essentially reraising issues addressed
at the summary judgment hearing. KMK opposed the motion and moved for
sanctions against Robert, arguing that Robert: filed a frivolous motion; engaged in
a pattern of inappropriate litigation; and had been previously sanctioned in other
unrelated court actions.
¶5 The circuit court held a hearing on the parties’ motions on
August 30, 2018. Ultimately, the circuit court granted KMK’s motion and denied
Robert’s motion. The circuit court found that Robert engaged in dishonest
behavior throughout the course of the litigation and that Robert’s motion was
frivolous with no basis in fact or law. The circuit court entered an order requiring
Robert to pay a $5000 sanction and to obtain leave of the court prior to filing any
additional motions against KMK stemming from KMK’s representation of the
Hutchinsons or MAI.
¶6 Following the dismissal of his motion for relief from judgment and
the imposition of sanctions by the circuit court, Robert, pro se, filed a motion for
4
According to the record before us, only Robert was involved in the proceedings from
this point on.
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No. 2019AP458
contempt and sanctions based on what he claimed were five misrepresentations
made by KMK at the August 30, 2018 hearing. The motion alleged that KMK:
(1) falsely claimed that it was attempting to domesticate its judgment in Georgia,
where the Hutchinsons had moved; (2) misrepresented that its insurance company,
The North River Insurance Company (North River), joined KMK’s objection to
Robert’s relief from judgment; (3) falsely claimed to have reviewed a transcript of
an underlying arbitration proceeding; (4) misrepresented that it filed an affidavit of
service for its motion for sanctions within the appropriate time period; and
(5) misrepresented that the circuit court addressed an issue regarding cell phone
data which Robert raised in his motion for relief from the summary judgment.
¶7 KMK filed a motion for contempt and sanctions, arguing that Robert
violated the circuit court’s order requiring Robert to seek leave of the court prior
to filing additional motions and for making misrepresentations and frivolous
arguments.
¶8 At a hearing on both of the motions, the circuit court addressed each
of Robert’s complaints, denied Robert’s motion, and granted KMK’s motion. The
circuit court found that Robert “brought before the court non-meritorious
arguments.” This appeal follows.
DISCUSSION
¶9 On appeal, Robert reargues that KMK made multiple
misrepresentations during the August 30, 2018 hearing and contends that the
circuit court erroneously exercised its discretion when it granted KMK’s motion
for contempt and sanctions.
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No. 2019AP458
¶10 “We review the [circuit] court’s decision to impose sanctions and the
appropriateness of the sanctions ordered under an erroneous exercise of discretion
standard.” Lee v. GEICO Indem. Co., 2009 WI App 168, ¶16, 321 Wis. 2d 698,
776 N.W.2d 622. “‘[W]e will affirm the [circuit] court’s decision if it examined
the relevant facts, applied a proper standard of law, and reached a reasonable
conclusion.’” Id. (quoting Schultz v. Sykes, 2001 WI App 255, ¶8, 248 Wis. 2d
746, 638 N.W.2d 604).
¶11 “Circuit courts are bestowed with those powers necessary to
maintain their dignity, transact their business, and accomplish the purposes of their
existence.” Schultz, 248 Wis. 2d 746, ¶2. Thus, a circuit court has inherent
authority to impose sanctions on a party for misconduct during litigation. See
Johnson v. Allis Chalmers Corp., 162 Wis. 2d 261, 273-74, 470 N.W.2d 859(1991) (noting that courts have “inherent authority to sanction parties for failure to
prosecute, failure to comply with procedural statutes or rules, and for failure to
obey court orders”), overruled on other grounds by Industrial Roofing Servs.,
Inc. v. Marquardt, 2007 WI 19, 299 Wis. 2d 81, 726 N.W.2d 898; see also Lee v.
LIRC, 202 Wis. 2d 558, 562, 550 N.W.2d 449 (Ct. App. 1996) (concluding that
the circuit court had inherent authority to dismiss the case because the plaintiff had
failed to file a brief).
¶12 When the circuit court imposed sanctions, it did so primarily because
it found that: Robert was not truthful at times during the long course of litigation;
Robert filed frivolous motions; and Robert engaged in improper litigation. The
circuit court addressed each of Robert’s five misrepresentation claims against
KMK and found that all were meritless and not supported by the record. The
circuit court made numerous findings of facts as to each claim. Specifically, the
circuit court found: (1) there was no falsehood in KMK’s representations about its
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No. 2019AP458
efforts to enforce the relevant judgment in Georgia; (2) KMK did not misrepresent
North River’s joinder in KMK’s objection to Robert’s motion for relief from
judgment; (3) KMK’s counsel simply misspoke when referring to an arbitration
transcript, rather, counsel was referring to the arbitration decision; (4) KMK did
not misrepresent the existence of an affidavit of service of the motion for sanctions
that was at issue at the August 30, 2018 hearing; indeed, Robert received the
motion within the appropriate statutory time frame; and (5) the issue of cell phone
data discovery was previously decided by the summary judgment court and its
decision would not be overturned.
¶13 It is clear from the record that the circuit court examined the
extensive record in this case, applied the proper standard of law, and reached a
reasonable decision. We affirm.
By the Court.—Order affirmed.
This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)4.
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