Tammy Kolupar v. Wilde Pontiac Cadillac, Inc.
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2004 WI 112 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 02-1915 Tammy Kolupar, Plaintiff-Appellant-Petitioner, v. Wilde Pontiac Cadillac, Inc. and Randall Thompson, Defendants-Respondents. REVIEW OF A DECISION OF THE COURT OF APPEALS 2003 WI App 175 Reported at: 266 Wis. 2d 659, 668 N.W.2d 798 (Ct. App. 2003-Published) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: March 12, 2004 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Milwaukee Thomas R. Cooper JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: July 13, 2004 ABRAHAMSON, C.J., dissents (opinion filed). BRADLEY, J., joins dissent. SYKES, J., did not participate. ATTORNEYS: For the plaintiff-appellant-petitioner there were briefs by Paul M. Erspamer and Lisko & Erspamer, S.C., Waukesha, and oral argument by Paul M. Erspamer. For the defendants-respondents there was a brief by James W. Hammes, Kathryn Sawyer Gutenkunst, and Cramer, Multhauf & Hammes, LLP, Waukesha, and oral argument by Kathryn S. Gutenkunst. An amicus curiae brief was filed by Mary Catherine Fons, Stoughton, on behalf of Fons Law Office; Judy Tomczak, Madison, on behalf of Tomczak Law Office, LLC; Jeff Scott Olson, Madison, on behalf of The Jeff Scott Olson Law Firm, S.C.; and Edward W. Harness, Milwaukee, on behalf of he Consumer Guardian Group. . An amicus curiae brief was filed by De Vonna Joy, Big Bend, on behalf of the Consumer Justice Law Center; and Gwendolyn G. Connolly, Milwaukee, on behalf of the Law Office of Gwendolyn G. Connolly. An amicus curiae brief was filed by Jon G. Furlow and Michael Best & Friedrich, LLP, Madison, on behalf of Fairfield Resorts, Inc., and oral argument by Jon G. Furlow. An amicus curiae brief was filed by Stephen E. Meili and Marissa Santiago, Madison, on behalf of The Consumer Law Litigation Clinic of the University of Wisconsin Law School; Peg Lautenschlager and Cynthia Hirsch, Madison, on behalf of the Wisconsin Department of Justice; and Mitchell Hagopian, Madison, on behalf of The Wisconsin Coalition for Advocacy, Inc. An amicus curiae brief was filed by Colleen D. Ball, Wauwatosa, and Jeffrey R. Myer, Milwaukee, on behalf of Legal Action of Wisconsin, and oral argument by Jeffrey R. Myer. 2 2004 WI 112 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 02-1915 (L.C. No. 00 CV 2571) STATE OF WISCONSIN : IN SUPREME COURT Tammy Kolupar, FILED Plaintiff-Appellant-Petitioner, v. JUL 13, 2004 Wilde Pontiac Cadillac, Inc. and Randall Thompson, Cornelia G. Clark Clerk of Supreme Court Defendants-Respondents. REVIEW of a decision of the Court of Appeals. Affirmed in part and cause remanded. ¶1 DAVID T. PROSSER, J. This is a review of a published decision of the court of appeals.1 In the beginning this case involved a suit by Tammy Kolupar (Kolupar) against Wilde Pontiac Cadillac (Wilde) and one of Wilde's employees, Randall Thompson, over the sale of underlying claims settled, against 1 and the Thompson. an are unsatisfactory no longer circuit The used at issue; car. Kolupar court entered a primary question in default this Kolupar's and Wilde judgment review is Kolupar v. Wilde Pontiac Cadillac, Inc., 2003 WI App 175, 266 Wis. 2d 659, 668 N.W.2d 798. No. 02-1915 whether the circuit court properly exercised its discretion in awarding reasonable attorney fees and costs. ¶2 Kolupar argues that the circuit court failed to apply the proper legal analysis when it concluded that $15,000 was an appropriate award for fees and costs. In her view, the circuit court: (1) failed to expressly consider factors approved by this court for determining reasonable attorney fees; (2) failed to apply the "lodestar" method for determining reasonable attorney fees; and (3) erred by considering the recommendation discovery referee appointed by the court. of a Kolupar asserts that if the court had considered and applied the appropriate law, it would have determined that a substantially higher award of attorney fees was appropriate. ¶3 Wilde undertake an counters that appropriate the circuit analysis and erroneously exercise its discretion. court did fact did therefore in not Wilde posits that this court should defer to the circuit court's decision. ¶4 The $15,000 award circuit for court's fees and primary costs explanation indicates that for the the court believed Kolupar pleaded an excessive number of claims in her complaint. The court also stated that this "over-pleading" at the outset caused the case to be "over-tried" and discovery to be "well over-done." While both Kolupar and Wilde seem to acknowledge that each spent more time litigating this small case than the case deserved, they each pin the blame on the other side's unreasonableness as the litigation. 2 source of the excessive No. 02-1915 ¶5 We uphold the circuit $15,000 in attorney fees. court's decision to award The court's explanation mirrored the sparse information it had available to make its decision. If Kolupar had properly submitted the documentation supporting the number of hours reasonably expended, then the explanation would likely not withstand scrutiny. court's However, the circuit court's explanation comported with the type and amount of information it had in the absence of such documentation. As a result, the circuit court's explanation reflected Kolupar's unmet burden to demonstrate the reasonableness of the requested award. By contrast, although the circuit court understood that substantial costs were incurred, it did not concluded that no costs were appropriate. explain why it We therefore remand the issue to the circuit court to address the issue of costs. BACKGROUND ¶6 On March 29, 2000, Kolupar sued Wilde and Thompson in Milwaukee County Circuit Court to recover damages allegedly incurred in connection with the purchase of a 1985 Mercedes Benz 190E. new According to Kolupar's civil complaint, Thompson, Wilde's car manager, accepted Kolupar's 1993 Pontiac Sunbird in exchange for the Mercedes, and represented that the Mercedes was in good mechanical condition. The transaction took place in March of 1994 at the Wilde dealership, but a court has never formally determined whether Thompson was acting as an agent of Wilde or whether he was "curbing cars" on his own. ¶7 Kolupar asserted that both Wilde and Thompson were liable for fraud, federal and state odometer law violations, 3 No. 02-1915 breach of express Wisconsin's 94).2 motor Wilde and implied vehicle responded warranties, statute, to the involvement in the transaction.3 and violations Wis. Stat. § 218.01 complaint by of (1993- denying any In May 2001, Kolupar dropped the federal odometer claim which permitted treble damages when Wilde moved for summary judgment based upon the federal claim's two-year statute of limitation. If the case had gone to trial, the main factual issue likely would have been whether Thompson acted under Wilde's actual or apparent authority. ¶8 half There was no trial. years after Kolupar In December of 2002, two and one- initiated suit, Wilde and Kolupar settled the underlying claim for $6,600 dollars plus taxable costs. the Between the inception of litigation and this settlement, parties litigated the suit vigorously through numerous motions, near-constant correspondence, and headstrong, sometimes obstinate behavior regarding discovery matters that ultimately necessitated the appointment of a discovery referee. ¶9 By the time the parties settled, Kolupar asserted that she had accumulated approximately $41,000 in attorney fees and 2 Subchapter I of Chapter 218 of the Wisconsin Statutes has since been substantially renumbered and revised. See 1999 Wis. Act 31; see also Conversion Table for Subchapter I of Chapter 218, Wisconsin Statutes 3596-98 (2001-02). All references are to the 1993-94 statutes unless otherwise noted. 3 Thompson failed to comply with numerous court deadlines and the court granted Kolupar's motion for default judgment against him on February 25, 2002. While Thompson did appear by attorney to address the attorney fee issue in May 2002, his involvement is not material to our discussion. 4 No. 02-1915 almost $11,000 in litigation expenses. Along with the $6,600 settlement, Wilde offered $15,000 in attorney fees, but Kolupar rejected that offer. Thus, the settlement left unresolved the issue of attorney fees. for the claim, underlying and authority since to Since the $6,600 plus taxable costs claim that award encompassed section "actual Kolupar's provides costs, § 218.01(9) that a court has including a reasonable attorney fee," Milwaukee County Circuit Judge Thomas R. Cooper, concluded that attorney fees were appropriate in this case. ¶10 Judge Cooper held hearings on May 13 and May 14, 2002, in order to resolve the issue of attorney fees and costs. court received testimony from Frank T. Crivello (a The former circuit judge who served as a discovery referee), Kolupar, Paul Erspamer (Kolupar's president of attorney), Wilde). establishing each The party's and Patrick testimony Donahue focused culpability for (vice- primarily the on escalating litigation expenses incurred by the parties. ¶11 Near the conclusion of the hearing, Judge addressed the billing documentation submitted by Kolupar. asked that information Judge because Cooper Kolupar violation of a local rule. refuse to filed the consider billing the Cooper Wilde written information in Milwaukee County Circuit Court Rule 365 directs that a party who wishes to submit any documents in support of a motion (other than a motion for summary judgment or dismissal) must provide opposing counsel with the materials no later than 10 days before the hearing date. 5 Wilde did not No. 02-1915 receive the invoice until Friday, May 10, 2002, for a Monday, May 13, 2002, hearing. See Milwaukee Cty. Ct. R. 365(a).4 ¶12 Judge Cooper agreed with Wilde, holding that Kolupar's submission failed to comport with local rules. As a sanction for consider noncompliance, Judge Cooper declined to the untimely filed material in his decision. ¶13 At the conclusion of the hearing, Judge Cooper awarded Kolupar $15,000 in fees and costs. Judge Cooper stated that he was on relying, Crivello. at least in part, the recommendation Crivello testified at the hearing that: In thirty years in [the] practice of law, as well as fifteen years as a circuit judge myself[,] I have never seen a $6,000.00 case grow barnacles the way this one has. . . . . I have served as special master in cases on numerous occasions here in Milwaukee County since leaving the bench. The only case that I have ever seen that approached this magnitude was . . . a multimillion dollar insurance case with fifteen defendants, including one British defendant. So without . . . going through every page of the several 4 Milwaukee County Circuit Court Rule 365(a) provides: If a movant desires to file a brief, affidavit, or other documents in support of a motion other than one for summary judgment or dismissal, such motion and supporting materials shall be received by all counsel of record and/or parties not represented by counsel of record and filed with the deputy court clerk of the assigned judge no later than ten (10) calendar days (including Saturdays, Sundays and holidays) before the time specified for the hearing. Milwaukee Cty. Ct. R. 365(a). 6 of No. 02-1915 thousand pages I have in my possession, I recall three or four instances where I sanctioned [Kolupar's attorney] myself by barring the presentation of testimony, or documents, or witnesses. . . . . Having examined the case in and evidence over the course of months of correspondence, I think and evidentiary issues in this inflated. This was a two-person automobile. . . . terms of discovery three hearings and that the discovery case were grossly transaction for an . . . . . . . So I would . . . adopt the offer in judgment and award the plaintiff the $6,600.00, which apparently she has accepted, and I would award $15,000.00 from the defendant to the plaintiff in fees. And that is how I would dispose of this case if I were asked to. I am troubled and I don't mean to be offensive to these lawyers, who[m] I have a great deal of professional respect for. . . . And I don't think the case is worth much more than [$]15,000 in fees, frankly. Although I know both sides spent a lot more time than that. When lawyers decide to do that, then they bear the onus of that decision. ¶14 On the second day of the hearing, after testimony and argument, Judge Cooper explained his decision as follows: There is no question this case was over-tried. Discovery was over well over-done. It was over[pled] right from the get-go on the complaint. There was the shotgun pleading where everything was [pled] against Wilde short of conquering Europe during World War II. So that was the framework, and the daunting discovery mountain was created right from the get-go. And that was based upon the plaintiff's pleading. A lot of that I think was over-pled, but it only applies as to what are reasonable attorney's fees during the 7 No. 02-1915 course of process. a contentious non-cooperative discovery . . . . Like [counsel] said, this matter was over-tried. The long and short of it, it comes down to I appreciate [the discovery referee's] recommendation. I think it's appropriate. I happen to concur with it. In my discretion I believe that there is entitlement for reasonable attorney's fees on behalf of the plaintiff. Reasonable attorney's fees in my mind of $15,000. . . . . . . . There was way too much work done, and there should have been a focus, and much earlier in the proceedings. And there is nobody here with clean hands, so that's the order of the Court. Joint and several. ¶15 of costs, When Kolupar asked Judge Cooper to clarify the issue he responded that $15,000 included both fees and costs. ¶16 After her motion for reconsideration was denied by the circuit court, Kolupar appealed. A divided court of appeals voted to uphold the circuit court's determination. It concluded that Judge Cooper did not err by excluding Kolupar's billing documentation for untimely filing, did not err by considering the recommendation of the discovery referee, applied the correct legal standard in reaching its conclusion as to attorney fees, and did not deny taxable costs. Fine concluded that Judge In dissent, Judge Ralph Adam Cooper did not consider the appropriate factors in reaching a reasonable attorney fee award, and the court should have relied 8 on Kolupar's billing No. 02-1915 documentation rather than the recommendation of the discovery referee. DISCUSSION ¶17 the Under the American Rule, the parties to a lawsuit bear cost of their own attorney authorization to shift costs. fees absent legislative Buckhannon Bd. and Care Home, Inc. v. West Virginia Dep't of Health & Human Res., 532 U.S. 598, 602 (2001); Hensley v. Eckerhart, 461 U.S. 424, 429 (1983); Kremers-Urban Co. v. Am. Employers Ins. Co., 119 Wis. 2d 722, 744, 351 N.W.2d 156 (1984) ("Each party to a lawsuit, under [the American Rule], should bear its own costs of litigation."). The Wisconsin legislature has authorized courts to award costs and attorney See, e.g., fees Wis. to successful Stat. litigants § 100.18(11)(b) in many (2001-02) contexts. (Wisconsin Deceptive Trade Practices Act (DTPA)); Wis. Stat. § 218.0171(7) (2001-02) (Wisconsin Lemon Law); 425.308(1-2) (2001-02) (Wisconsin Consumer Act (WCA)). ¶18 Kolupar's complaint included a claim for relief pursuant to Wis. Stat. § 218.01(9)(b), now renumbered as Wis. Stat. § 218.0163(2). Chapter 218 of the Wisconsin regulates the automobile business in many respects. Statutes See Dep't of Transp. v. Transp. Comm'n, 111 Wis. 2d 80, 92, 330 N.W.2d 159 (1983). Part of its design is "to protect Wisconsin buyers of motor vehicles from fraud." Id. at 94 (citing State v. Helwig, 262 Wis. 299, 301, 54 N.W.2d 907 (1952)). provides that "retail buyers" who 9 To this end, § 218.01 suffer pecuniary loss may No. 02-1915 recover damages in court. In 1994, the time of the relevant transaction in this case, § 218.01(9)(b) provided as follows: Any retail buyer suffering pecuniary loss because of a violation by a licensee of sub.(3)(a)4., 5., 6., 8., 9., 10., 11., 18. or 31. may recover damages for the loss in any court of competent jurisdiction together with costs, including reasonable attorney fees. ¶19 An interesting question, though one not presented by the present case, is whether the word "may" in § 218.01(9)(b) indicates that the decision to award or not award costs and attorney fees is discretionary. Unlike some fee-shifting statutes, § 218.01(9)(b) does not use the word "shall," which would indicate awarded to language that costs, successful does not including litigants. state that attorney However, the court we may fees, note must that award be the costs, including reasonable attorney fees, but rather provides that a retail buyer suffering pecuniary loss for a recognized violation "may recover damages for the loss in any court of competent jurisdiction together with costs, including reasonable attorney fees." Wis. Stat. § 218.01(9)(b) (emphasis added). certainly be odd for a circuit judge to decline It would to impose damages once it has been determined that the plaintiff suffered pecuniary defendant. award loss as a result of a listed violation by the Given that the statute directs that the court "may" damages "together with costs, including reasonable attorney fees," the statute may dictate that where damages are awarded, costs including attorney fees should follow. 10 No. 02-1915 ¶20 taxable In this case, costs resulted Kolupar's from recovery Wilde's offer of of $6,600 plus settlement, as opposed to a factfinder's determination that Kolupar met the statutory threshold § 218.01(9)(b). entitling her to recover under The settlement was in satisfaction of Kolupar's underlying claims, including her § 218.01(9)(b) claim. Even if the award of costs were at the discretion of the court, Judge Cooper said here he was persuaded that the statute controlled and that reasonable attorney fees were due. A. Attorney Fees ¶21 We now turn our attention to the specific question presented by this case: Once costs are either required or found appropriate, how should the court arrive at a proper attorney fee award? ¶22 Judge Cooper expressly determined that, discretion, $15,000 in attorney fees was reasonable. in his When a circuit court awards attorney fees, the amount of the award is left to the discretion of the court. First Wisconsin Nat'l Bank v. Nicolaou, 113 Wis. 2d 524, 537, 335 N.W.2d 390 (1983). uphold the circuit court's determination unless court erroneously exercised its discretion. the We circuit Standard Theatres, Inc. v. Transp. Dep't, 118 Wis. 2d 730, 747, 349 N.W.2d 661 (1984). We give deference to the circuit court's decision because the circuit court is familiar with local billing norms and will likely have witnessed first-hand the quality of the service rendered by counsel. Id. Thus, we do not substitute our judgment for the judgment of the circuit court, but instead 11 No. 02-1915 probe the court's explanation to determine if the court "employ[ed] a logical rationale based on the appropriate legal principles and facts Corp., Vill. 197 of Wis. 2d of record." 973, Shorewood v. 987, Hughes 542 Steinberg, N.W.2d 174 v. 148 Chrysler (1996) Wis. 2d 191, Motors (quoting 204, 496 N.W.2d 57 (1993)). ¶23 What are the appropriate legal principles courts are to apply in determining whether a fee is appropriate? ¶24 Supreme attorney fees. Court Rule 20:1.5 addresses reasonable This rule was not drafted as a guide for courts to determine reasonable fees under fee-shifting statutes; it was designed to govern the ethical obligation of attorneys to charge reasonable fees. Nonetheless, this court has endorsed the factors set out in SCR 20:1.5 and encourages courts to apply these factors when they are required to determine or evaluate attorney fees. cases). Using their See the discretion allowing Shorewood, enumerated with applicants a and 174 Wis. 2d at factors consistent their helps set of opponents courts legal to 204 (citing exercise principles, structure legal arguments and present evidence in the same manner. ¶25 be Supreme Court Rule 20:1.5(a) lists "[t]he factors to considered in determining the reasonableness of a fee." These factors are: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; 12 No. 02-1915 (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. ¶26 Although SCR 20:1.5 does not purport to be exhaustive, its factors encompass a variety of considerations appropriate in the fee-shifting context. quite subjective. variation. Therefore the results are open to significant The factors do not lead to a single unitary value as the only reasonable fee. fees and abstract, Admittedly, the factors are often different we might They can justify a range of reasonable methods imagine of an calculating attorney using them. the In factors the to determine the reasonable range of fees that the attorney may ethically charge, and then determine the fees that he or she will actually charge based upon the market, perception of the market, for legal services. or his or her As a practical manner, attorneys probably determine the market value of their services, and then employ the factors to evaluate whether that 13 No. 02-1915 market rate is reasonable. Either way, conceptually speaking, the factors serve to ferret out unreasonable fees; they do not command the analytical precision to lead a user to a single reasonable figure. ¶27 Thus, when courts endeavor to determine a reasonable fee using the factors listed in SCR 20:1.5, variation is to be expected. To the extent that discretionary decision-making can be made more uniform and transparent by providing an objective framework to assess these factors, such a framework is desirable. ¶28 The quest for a suitable framework for employing the SCR 20:1.5 factors is not uncharted territory. years ago, the United States Supreme More than 20 Court refined the methodology in federal courts for awarding attorney fees under fee-shifting statutes. Hensley, 461 U.S. 424. The Court acknowledged that the facts of each particular case ultimately govern the legislative amount history of fees. of the Id. at statute 429. at Noting issue in that that the case expressed approval of 12 factors adopted by the Fifth Circuit Court of Appeals in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974),5 id. at 429-30, the Court 5 These factors are: (1) time and labor required; (2) novelty and difficulty of issues; (3) skill required; (4) loss of other employment in taking the case; (5) customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by client or circumstances; (8) amount involved and result obtained; (9) counsel's experience, reputation, and ability; (10) case 14 No. 02-1915 outlined a procedure for determining the amount of a reasonable attorney fee utilizing that incorporates the Johnson factors. an objective The Court component stated: while "The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services." Hensley, 461 U.S. at 433. The structural starting point employed by the Court appears to have been inspired by Lindy Bros. Builders, Inc. of Philadelphia v. Am. Radiator & Standard Sanitary Corp., 487 F.2d 161, 168 (3rd Cir. 1973), which commented that "the amount thus found to constitute reasonable compensation should be the lodestar of the court's fee determination." ¶29 The Hensley (Emphasis added). Court explained that the product of reasonable hours multiplied by a reasonable rate the so-called "lodestar" figure subsumes many of the twelve Johnson factors, 461 U.S. at 434 n.9, but a court ought not end its analysis after arriving at that number. A court may adjust this lodestar figure up or down to account for any remaining Johnson factors not embodied in the lodestar calculation. Id. at 434. Since Hensley, the lodestar approach has become "the guiding light of [the Court's] fee-shifting jurisprudence." Gisbrecht v. undesirability; (11) nature and length of relationship with the clients; and (12) awards in similar cases. Johnson v. Georgia Highway Express, 488 F.2d 714, 717 (5th Cir. 1974). 15 No. 02-1915 Barnhart, 535 U.S. 789, 801 (2002) (citing Burlington v. Dague, 505 U.S. 557, 562 (1992)). ¶30 The obvious similarities between the Johnson factors and the factors enumerated in SCR 20:1.5 have their origin in the American Bar Responsibility, Association's Disciplinary Rule Code 2-106 of Professional (1969). Hensley's endorsement of a method to analyze the Johnson factors under an objective framework is compelling. court's discretion to set an It reinforces the circuit award within a range of reasonableness and at the same time injects the exercise of that discretion with objectivity and uniformity. These aspirations are so important and desirable that we adopt Hensley's lodestar methodology and direct the circuit courts to follow its logic when explaining how a fee award has been determined. ¶31 With respect to Judge Cooper's explanation for the fee award in this case, we note the dearth of hard facts available to the court. If Judge Cooper had relied on the Hensley lodestar approach that we adopt today, he would have been within his discretion to significantly reduce the attorney fee award to nothing or nearly nothing. As Hensley makes clear, "[t]he party seeking an award of fees should submit evidence supporting the hours worked and rates claimed. Where the documentation of hours is inadequate, the district court may reduce the award accordingly." Judge Cooper 461 U.S. at 433 (emphasis added). did not consider any billing As noted, invoices or other documentation of the hours worked as a sanction for Kolupar's failure to comply with local rules. 16 The court of appeals No. 02-1915 affirmed Judge Cooper's interpretation of the rule giving rise to the sanction, and Kolupar did not raise this issue in her petition for review. Because this issue is not properly before us, we do not address it, see Wis. Stat. § 809.62(6); see also White v. New Hampshire Dep't of Employment Sec., 455 U.S. 445, 454 (1982) (authorizing courts to reject fee requests when the requests fail to comply with local rules), except to observe that litigants who demand strict enforcement of the rules against others become vulnerable when they do not follow the rules themselves. fully satisfy her On the facts presented here, Kolupar did not burden to produce evidence of the hours worked, and Judge Cooper could have reduced her award, perhaps to a nominal amount, solely on that basis. ¶32 Judge Cooper nevertheless concluded that attorney fees were appropriate. The absence of billing documentation meant that he had few objective facts to rely upon in arriving at a figure for Kolupar's fees. amount Kolupar sought in The testimony reiterated the total fees and costs was approximately $53,000, and the court accepted that this figure constituted Kolupar's actual attorney fees and litigation expenses. Without the billing invoices, however, the court could not know how much time Kolupar's attorney spent on particular tasks, and therefore could make no assessment as to whether the hours her attorney exercised in pursuing the claim were reasonable. This rendered any analysis under a lodestar approach impractical. ¶33 With respect to an analysis using the SCR 20:1.5 factors outside the lodestar framework, which until today has 17 No. 02-1915 been the accepted methodology, Kolupar stresses that Judge Cooper did not expressly mention the factors nor did he discuss the full array of factors in his analysis. Judge Cooper's analysis is best explained by considering the amount and type of the information teased out at the hearing. The nature of the information did not lend itself to a factor-by-factor analysis because the lion's share of the testimony and argument focused myopically discovery on who rather was than more on at what fault SCR for 20:1.5 certain delays factors or in other methodology should guide the court to an appropriate award. ¶34 This becomes clear if we examine the factors individually and compare them with the information adduced at the hearing. of fees Kolupar had the burden to demonstrate the amount submitted were reasonable, Milwaukee Rescue Mission, Inc. v. Redevelopment Auth. of Milwaukee, 161 Wis. 2d 472, 494, 468 N.W.2d 663 (1991) (citing Standard Theatres, 118 Wis. 2d at 748), and Kolupar failed in this regard because Judge Cooper had little award.6 relevant information to assist him in making his fee In the end, although we agree with Kolupar that, ideally 6 By combing the information available from the hearing transcript, we do not mean to imply that a hearing is always necessary or that a proper exercise of discretion will require courts to similarly focus on testimony if there is a hearing. We encourage the bar and judiciary to develop uniform procedures for determining attorney fees when appropriate, which may or may not include a hearing. 18 No. 02-1915 the court should discuss each of these factors, we cannot justify a finding that Judge Cooper erroneously exercised his discretion when Kolupar failed in her burden to provide the court with anything meaningful to discuss. ¶35 We look to the eight factors set out in SCR 20:1.5 in relation to the award. ¶36 Paragraph (a)(1) lists "the time and labor required, the novelty and difficulty of the questions involved, and the skill Kolupar requisite presented to perform evidence as the to legal the services rate properly." charged, $145 per hour, but because of the sanction, she did not present detailed information of what activities her attorney performed. Thus, Judge Cooper could not reach a conclusion as to whether the time Kolupar's attorney spent on the matter was reasonable, even if the rate was reasonable. By all accounts, the legal questions involved were neither novel nor particularly difficult, nor was the level of skill required to perform these legal services such that it warranted a large fee. The factual questions required investigation, and the testimony certainly explained some of the successes and failures of Kolupar's attorney's factual inquiries, yet the testimony did not establish the amount of The above discussion is necessary for our analysis to demonstrate the dearth of reliable information available to Judge Cooper in the absence of Kolupar's billing information. When the court is presented with reliable and accurate documentation as to the amount and nature of the time expended on the case, it would not be improper for the court to rely principally on that documentation. 19 No. 02-1915 time expended in those pursuits. Without a global accounting of how the attorney's time was spent, Judge Cooper could not arrive at a figure for the investigative component of Kolupar's attorney's bill, much less a figure for all his activities. ¶37 Paragraph (a)(2) speaks to the likelihood, "if apparent to the client, that the acceptance of the particular employment will preclude Kolupar's attorney other testified employment at the by hearing the that he lawyer." was not precluded from taking on other work while this case proceeded. ¶38 Paragraph (a)(3) addresses the fee customarily charged in the locality for similar services. the hourly rate other Some testimony touched on attorneys charge, but as already discussed, even assuming the hourly rate was reasonable, that figure is information not as useful to how where the the court hours is claimed without were reliable spent. No information was given regarding the overall size of attorney fees in automobile fraud cases, nor would we expect there to be a typical attorney fee based on an hourly rate calculation because the amount of work reasonably required would vary widely from case to case. ¶39 Setting to one side paragraph (a)(4) for the moment, we note that no evidence regarding any time limitations imposed by Kolupar was presented under paragraph (a)(5). ¶40 nature Paragraph and length (a)(6) of time permits of the the consideration professional of the relationship between Kolupar and her attorney. The testimony suggests that the extended attorney-client relationship 20 only to matters No. 02-1915 involving the particular automobile transaction at issue in this lawsuit. We do not see how the limited nature of their professional relationship would dictate a particular total value for all her attorney's services. ¶41 Paragraph (a)(7) speaks to the experience, reputation, and ability of the lawyer performing the services. Kolupar's attorney testified that he had 18 years of experience and had handled similar cases in the past. Again, this information may buttress particular the reasonableness of a hourly rate, a particular contingent percentage, or a particular fixed fee, but it fails to establish the valuation of an overall fee based on an hourly rate without a companion figure for the amount of hours expended and the tasks performed. ¶42 Paragraph (a)(8) addresses whether the fee is fixed or contingent. Here the fee was neither fixed nor contingent, but was calculated at an hourly rate. This only serves to highlight the unhelpfulness of information regarding other factors that support the reasonableness of such a particular hourly rate in the absence of specific documentation about the hours expended. ¶43 "the Judge Cooper's explanation relied almost entirely on amount paragraph involved (a)(4), and and for the results good obtained" reason. In pursuant this case, to the primary SCR 20:1.5 factor on which the court had objective and reliable information was paragraph (a)(4). The Hensley case discusses this "important" factor at length, and directs that courts ask: "[D]id the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for 21 No. 02-1915 making a fee award?" 461 U.S. at 434. In evaluating this factor, the Court stated that "the most critical factor is the degree of success obtained." Id. at 436. "Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee." ¶44 Id. at 435. Judge Cooper emphasized that the case was over-tried and over-pled: "There is no question this case was over-tried. Discovery was over well over-done. from the pleading get-go where conquering on the complaint. everything Europe It was over-[pled] right during was There [pled] World War was against II. the Wilde So that shotgun short of was the framework, and the daunting discovery mountain was created right from the get-go. And this was based upon the plaintiff's pleading." ¶45 a Indeed, Kolupar asserted five claims, one of which was federal claim that she eventually statute of limitation had long passed. abandoned because the This federal claim would have authorized the court to award treble damages. When Kolupar first itemized her damages in August of 2000, the figure was $10,600 plus unspecified repair expenses, interest charges, and financing charges. Absent the amounts for which Kolupar did not provide a specified value,7 and considering the potential for treble damages, Wilde faced a claim at this time for at least $31,800. 7 When amounts were eventually specified for these classes of damages, they were significant. See infra note 9. 22 No. 02-1915 ¶46 In April, 2001, over a year after Kolupar instigated the litigation, she provided the court a more specific damage calculation. In this new itemization of damages, she sought to recover for: 1. Loss of use of a reliable motor vehicle, specifically, the 1993 Pontiac Sunbird calculated at a reasonable rental rate for similar vehicle for [a 31day period]. 2. Judgment against Tammy Kolupar by Waukesha State Bank in the principal amount of $9,155.67, together with interest accruing since May, 1995 at 12% per annum (less an offset for $2,000.00 received by Tammy Kolupar upon sale of the 1985 Mercedes). 3. Repair costs to the Mercedes (currently known to be $615.76, but investigation continue[s]). 4. Loan payments the Mercedes loan. and finance charges paid on 5. Insurance premiums paid on the Mercedes (believed to be $384.00 for the period 04/28/94 to 06/25/94). 6. 7. ¶47 Attorneys' fees (accruing) Litigation expenses (accruing). With respect to the judgment in item 2, the requested sum of $9,155.67, with 12% annual interest calculated from May 1, 1995, through April 13th, 2001 (the date of the itemization), subtracting $2,000,8 equals $15,976.17. When this amount is added to the other specific figures, the total is $16,975.93. At this time, Kolupar still pursued the federal odometer claim and its treble damages, and, including only the hard numbers and 8 The $2,000 subtracted represents money received by Tammy Kolupar upon the sale of the 1985 Mercedes. 23 No. 02-1915 excluding the unvalued itemized damages, this figure multiplied by a factor federal of three odometer (as claim) per the brings treble the damages requested under damages the to a minimum of $50,927.79. ¶48 Even after the federal odometer claim was Kolupar's requested damages were still quite large. dropped, In June of 2001, once Kolupar acknowledged that the statute of limitation had run on the federal claim, she submitted to the court an even more itemization.9 specific The total of all her damages, including a recalculation of the interest as of June 19, 2001, indicates that Kolupar sought $20,719.71. She also asked for approximately $35,000 in attorney fees and costs. ¶49 Thus, from both Tammy Kolupar's and perspectives, the amounts involved were quite large. settlement figure itemization itemized include of in all approximately $15,000 she received damages, April her of to was 2001, requested $41,000 amounts and in was only which approximately 32% 13% of of the The $6,600 her We fees 36% of note that the that, Kolupar fees lowest $50,927.79 parenthetically, damages. attorney only Wilde's did not of the sought, requested. While we do not approve a bright-line rule under which courts simply apply a strict ratio of the amount claimed and the amount of settlement to arrive at a reasonable fee, we do find it 9 The actual damages claimed included $2,500 loss of market value for the 1993 Pontiac Sunbird, $16,362.79 for the bank judgment plus interest minus $2,000, $615.76 cost to repair Mercedes, $857.16 in loan payments and finance charges, and $384 in insurance premiums on Mercedes. 24 No. 02-1915 significant that the fee in this case constituted a higher percentage of the total sought than the same ratio between the requested damages and the settlement. ¶50 The court clearly thought contributing to the excessive fees. claim for over $50,000 in the case was over-pled, Wilde was presented with a damages. The extent of Wilde's exposure may have caused it to adopt an uncompromising attitude with respect to this claim. Thus, to some extent the court was hypothesizing that the over-pleading instigated the contentious litigation that was to follow. This cause-and-effect appears reasonably event, based, and, in any we owe Judge Cooper deference.10 ¶51 While Kolupar's attorney has characterized the $6,600 as an excellent result because he was able to persuade the bank to accept this payment in full satisfaction of the outstanding principal and accumulated interest on her car loan, this is not the type of result with which SCR 20:1.5(a)(4) is concerned. This is indeed a good conclusion for Tammy Kolupar, but not with respect to this lawsuit. It is a good result with respect to 10 Kolupar takes issue with Judge Cooper's reliance on the discovery referee's recommendation. She asserts that it was erroneous for Judge Cooper to consider the discovery referee's opinion. This position misstates the level of reliance apparent from the record. Judge Cooper did not state that he was adopting the recommendation of the discovery referee. Instead, Judge Cooper stated that he appreciated his recommendation and happened to concur. This is quite separate from a situation where a court abdicates its discretionary authority. We see no error in acknowledging on the record a knowledgeable court officer's opinion. This is not the same as wholesale adoption of that opinion. 25 No. 02-1915 any potential litigation Waukesha State Bank. she might face over the loan with With respect to her lawsuit against Wilde, the results obtained were a fraction of the amount she sought, which the court deemed excessive and which perhaps contributed to the protracted litigation. ¶52 The circuit court decision with more depth. might well have explained its But as Hensley dictates, a court need give only a "concise but clear explanation of its reasons for the fee award when the reasonableness [of the requested fee] is challenged." given the information 461 U.S. at 437. facts of provided this to the case Here, $15,000 is sustainable and trial the court. lack of objective Accordingly, we affirm the fee award. B. Costs ¶53 We note that § 218.01(9)(b) does not authorize a court to award reasonable attorney fees alone; it authorizes a court to award costs, and the costs include reasonable attorney fees. In this case, the court made it clear that it was awarding $15,000 in attorney fees, which included costs. At the conclusion of the fee hearing, the following exchange occurred: [THE COURT]: In my discretion I believe that there is entitlement for reasonable attorney's fees on behalf of the plaintiff. Reasonable attorney's fees in my mind of $15,000. I am ordering $15,000 fee to plaintiff for attorney's fees and costs that was originally submitted as an offer of judgment. The flip side is Wilde has to swallow whatever fees they have. I think that establishes what the statute intended . . . . There was way too much work done, and there should have been a focus, and much earlier 26 No. 02-1915 in the proceedings. And there is nobody here with clean hands, so that's the order of the Court. Joint and several. [KOLUPAR'S ATTORNEY]: [THE COURT]: As to the costs? Fees and costs, $15,000. (Emphasis added). ¶54 The represented court a made reasonable a formal attorney finding fee, but that then $15,000 the court aggregated the cost award as part of the $15,000 award. In effect, the court awarded no costs. ¶55 award Section 218.01(9)(b) does not state that the court may costs linked; or attorney fees. Costs the court is authorized to reasonable attorney fee. and award attorney costs, fees are including a While the court may retain discretion to award $0 in costs or nominal costs, a decision to do so must be explained. Here, the court offered no explanation. The court may have believed the party's settlement for $6,600 plus taxable costs included the costs requested by Kolupar. Or perhaps the court believed the costs should not be awarded at all. An explanation is required. We therefore remand the court appeals is matter of costs to the circuit court. By the Court. The decision of the of affirmed in part and the cause is remanded to the circuit court. ¶56 DIANE S. SYKES, J., did not participate. 27 No. ¶57 SHIRLEY S. ABRAHAMSON, C.J. (dissenting). 02-1915.ssa This is a consumer protection case under a consumer protection law. consumer in this case has been victimized twice: The once by the defendants, the second time by the legal system. ¶58 By affirming the fees awarded by the circuit court, the majority opinion contravenes the spirit and letter of the statutes that "were designed to keep open the courthouse doors to persons whose claims do not justify the retention of a lawyer unless, by prevailing, that person can recover his or her attorneys fees."11 ¶59 Judge Fine's vigorous dissent in the court of appeals criticizes the defendants for taking advantage of Ms. Kolupar in the car transaction and in delaying and obfuscating the trial gives the reader the flavor of the case.12 Judge Fine wrote: Wilde Pontiac Cadillac, Inc., and its employee Randall Thompson not only took advantage of an eighteen-yearold woman but they also delayed and obfuscated the litigation process. Indeed, from my review of the record, I believe that they pursued a scorched-earth Rambo-litigation policy that has no place in our justice system.13 ¶60 The circuit court compounded the auto dealer's harm to Ms. Kolupar by failing to properly exercise its discretion in awarding reasonable attorney fees and costs.14 11 Kolupar v. Wilde Pontiac Cadillac, Inc., 2003 WI App 175, ¶32, 266 Wis. 2d 659, 668 N.W.2d 798 (Fine, J., dissenting). 12 Kolupar, 266 Wis.2d 659, ¶23 (Fine, J., dissenting). 13 Id. 14 The method of evaluation of fees is set forth in the majority opinion, ¶¶24-29. I agree with the lodestar approach. 1 No. ¶61 02-1915.ssa The majority opinion delivers the final blow to Ms. Kolupar by affirming the circuit court's erroneous discretionary award of fees. ¶62 The majority shifts the blame to Ms. Kolupar for the low award, asserting that the record before the circuit court had a "dearth of hard facts."15 ¶63 And whose fault was that? The dearth of hard facts was caused by the circuit court's refusal to admit Ms. Kolupar's documentation in support of her attorney's fees. Why weren't these documents admitted? Because the circuit court ruled that the submission was late under local court rules. I agree with Judge Fine that the circuit court incorrectly applied Local Rule 365. As Judge Fine wrote: The rule, however, governs "motions"; it does not apply to exhibits offered at trials or evidentiary hearings. Kolupar never filed a motion for attorneys fees; the statute permits them and she demanded them in her complaint. Indeed, the trial court sua sponte set the hearing on the attorney-fees matter: "We'll all meet back here on the date set for trial to the court on May 13th and we'll consider the attorneys' fee issue."16 ¶64 And even if this local rule applied in the present case (which it does not) and the documents were a few days late, the circuit court's sanction of refusing to admit the documents was too harsh and it was an erroneous exercise of discretion. 15 Majority op., ¶31. See also, (complaining about the sparse information). 16 majority op., Kolupar, 266 Wis. 2d 659, ¶28 (Fine, J., dissenting). 2 ¶5 No. ¶65 Does the majority opinion address the issue of the applicability of the local rule? again 02-1915.ssa placing the blame on No! Ms. The majority begs off by Kolupar, claiming that Ms. Kolupar did not present the issue in her petition for review and therefore did not preserve the issue for appeal as a matter of right.17 ¶66 I disagree. following issue: The petition for review presented the "Did the trial court erroneously exercise its discretion by failing to apply and consider the correct legal standard?" Included within the stated issue is the question whether the local rule was correctly applied. The petitioner is not for required to set forth in the petition review every argument that she will make in this court. ¶67 Moreover, the arguments of the parties did not focus on the state of the record. Neither party complains about the lack of documentation of the attorney's work in the record. As Judge Fine pointed out, "No one [that is, neither the parties nor the circuit court] disputes that Kolupar's lawyer did what he said he did and that his hourly rate was reasonable."18 ¶68 Rather, the briefs debate whether the circuit court considered the correct factors in reaching its decision. Ms. Kolupar's position is that the circuit court did not consider the correct legal standards. The defendant's position is that 17 Majority op., ¶31. The majority could, of course, exercise its discretion to address the issue but apparently is unwilling to do so. See Wis. Stat. § 809.62(6). If it did address the issue, the result of the case would be different. 18 Kolupar, 266 Wis. 2d 659, ¶34. 3 No. 02-1915.ssa the circuit court considered the correct factors. Why doesn't the waived majority opinion hold that the defendants any objection to the lack of documentation of attorney fees in the record and to Ms. Kolupar's supposed failure to assert that the local rule was improperly applied?19 If there is waiver, this court may proceed to decide the substantive issue. ¶69 The circuit court based its award of fees on the comments of the discovery master, which were not supported by any facts relating to the work of Ms. Kolupar's attorneys. Judge Fine properly questioned the circuit court's and court of appeals' deferral to the discovery master and the failure of the circuit court to consider relating to fees. master was not on the record any of the factors The former judge appointed to be a discovery appointed to assess the fees. He held no hearings, examined no evidence, and made no findings in regard to fees. Nevertheless, he offered an opinion on fees, which apparently significantly influenced the circuit court. Judge Fine wrote, somewhat harshly but not without justification, as follows: Yet, the Majority defers to the unfocused musings by both a former judge, appointed to oversee a small part of the discovery disputes in this case, and the trial court. . . . . The trial court here never considered on the record any of the factors [in determining attorney fees]. Rather, it deferred to the off-hand assessment of the 19 See State v. Guerard, 2004 WI 85, ___ Wis. 2d ___, ___ N.W.2d ___; State v. Evans, 2004 WI 84, ___ Wis. 2d ___, ___ N.W.2d ___. 4 No. 02-1915.ssa former judge who, as the Majority notes, was only appointed to be a discovery master. The trial court's abdication of its responsibility was palpable, as reflected by the transcript in the record. . . . Wilde suggested the $15,000 figure, and the former judge adopted it without any analysis beyond his view that more was not warranted because, with Kolupar's acceptance of the $6,600 offer of settlement, the case was 'just barely above a small claims case.'20 ¶70 recovery The discovery master erred in viewing the amount of as determinative of reasonable attorney fees. The amount of the recovery is not a measure of what the fee-shifting award should be in consumer protection cases.21 ¶71 Because supporting the circuit documents, court relied on excluded the Ms. master's Kolupar's unsupported proposed fee of $15,000, and failed to consider the factors the majority sets forth, it erroneously exercised its discretion in awarding only $15,000 in fees. I would reverse the judgment and remand the cause for reconsideration of attorney fees as well as costs, guided by the majority opinion's discussion of fees. ¶72 Accordingly, I dissent. ¶73 I am authorized to state that Justice ANN WALSH BRADLEY joins this opinion. 20 21 Kolupar, 266 Wis. 2d 659, ¶¶24, 27. Shands v. N.W.2d 506 (1983). Castrovinci, 5 115 Wis. 2d 352, 358, 340 No. 1 02-1915.ssa
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