John D. Hess v. Juan Fernandez III, M.D.

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2005 WI 19 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 03-0327 John D. Hess, Joan M. Hess, Adrienne V. Hess, and Emily M. Hess, a minor, by William Smoler, her Guardian ad Litem, Plaintiffs-Respondents-Cross-Appellants, Wausau Insurance Companies, Subrogated-Plaintiff, v. Juan Fernandez III, M.D., Defendant-Appellant-Cross-Respondent, Wisconsin Patients Compensation Fund, Defendant-Co-Appellant-Cross-Respondent. ON CERTIFICATION FROM THE COURT OF APPEALS OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: December 13, 2004 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Marathon Thomas S. Williams JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ABRAHAMSON, C.J., dissents (opinion filed). BRADLEY, J., did not participate. February 25, 2005 ATTORNEYS: For the defendant-appellant-cross-respondent there were briefs (in the court of appeals) by Christopher R. Bandt and Nash, Spindler, Grimstad & McCracken, Manitowoc, and oral argument by Christopher R. Bandt. For the defendant-co-appellant-cross-respondent there were briefs by Jon G. Furlow, Mary C. Turke and Michael Best & Friedrich, LLP, Madison, and oral argument by Jon G. Furlow. For the plaintiffs-respondents-cross-appellants there were briefs by William Smoler and Smoler Law Office, LLC, Monona, and oral argument by William Smoler. 2005 WI 19 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 03-0327 (L.C. No. 95 CV 138) STATE OF WISCONSIN : IN SUPREME COURT John D. Hess, Joan M. Hess, Adrienne V. Hess, and Emily M. Hess, a minor, by William Smoler, her Guardian ad Litem, Plaintiffs-Respondents-CrossAppellants, Wausau Insurance Companies, FILED Subrogated-Plaintiff, FEB 25, 2005 v. Cornelia G. Clark Clerk of Supreme Court Juan Fernandez III, M.D., Defendant-Appellant-CrossRespondent, Wisconsin Patients Compensation Fund, Defendant-Co-Appellant-CrossRespondent. APPEAL from a judgment of the Circuit Court for Marathon County, Thomas S. Williams, Judge. ¶1 N. certification PATRICK from CROOKS, the J. court Reversed and cause remanded. This of case is appeals before us pursuant on to No. Wis. Stat. § (Rule) 809.61 (2001-02).1 Juan 03-0327 Fernandez, M.D. (Fernandez) and the Wisconsin Patients Compensation Fund (Fund) appeal2 from an order of the Marathon County Circuit Court, Thomas S. Williams, Judge, which granted Joan, John, Adrienne, and Emily pleadings Hess's to allow (Hess) an post-verdict award of motion costs and to amend reasonable attorney fees pursuant to Wis. Stat. § 51.61(7)(a). the actual The circuit court, relying on Wis. Stat. § 802.09(2),3 held that Fernandez 1 Unless otherwise indicated all Statutes are to the 2001-02 edition. references to Wisconsin Wisconsin Stat. § (Rule) 809.61 states, in relevant part: "The supreme court may take jurisdiction of an appeal or other proceeding in the court of appeals upon certification by the court of appeals or upon the supreme court's own motion." 2 For the purposes of argument before this court, Fernandez joined the response combined brief of the Fund. 3 Wisconsin Stat. § 802.09(2) states: Amendments to conform to the evidence. If issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to so amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice such party in maintaining the action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence. 2 No. 03-0327 and the Fund had impliedly consented to the trial of § 51.61 issues and that they were not prejudiced as a result of the amendment. ¶2 We conclude that the circuit court erroneously exercised its discretion by granting the motion to amend the pleadings to include determine that Fernandez or Hess's was there the new express Fund no to try claim. In or the doing implied issues so, we consent by raised by the Wis. Stat. § 51.61 claim, and that the circuit court did not properly apply the balancing test when it allowed the amendment of the pleadings. ¶3 Additionally, we hold that, irrespective of the amendment, the Fund cannot be liable for costs and reasonable actual attorney fees under Wis. Stat. § 51.61(7)(a). The Fund is not a "person," and therefore is incapable of violating any rights of a patient under the statute. I ¶4 Joan Carolyn Hess Decker hypnosis to childhood. began (Decker) regress her counseling in August in order sessions to learn therapist Decker 1990. with employed more about her Her condition deteriorated, however, and she was hospitalized in May 1991. at the hospital. Fernandez was her admitting physician He had participated in her treatment since March 1991, and increased his role during her hospitalization. Fernandez authorized her continued treatment with hypnotherapy, and began personal sessions with her in November 1991. At some point recover during those treatments, 3 Joan Hess began to No. 03-0327 memories of sexual abuse and other unusual scenarios, such as images of her father and other relatives participating in cult activities, like group sex. Eventually, she came to believe that her father had molested her as killing a and child, eating and babies, subsequently bestiality, filed a and lawsuit against him for sexual abuse. ¶5 Joan Hess's condition continued to deteriorate throughout 1992, forcing her to be hospitalized on five separate occasions. In May 1992, Fernandez diagnosed her with multiple personality disorder. In addition, Fernandez agreed that she should undergo a hysterectomy because she suffered anxiety at the sight of blood. ¶6 In July 1994, Joan Hess ended her care with Fernandez. Over the next couple of years, she came to realize that her memories, and the diagnosis of multiple personality, were false and caused by Fernandez. In March 1995, Hess filed a claim under Wis. Stat. ch. 655 against Decker4 and Fernandez, alleging negligence and failure to obtain informed providing Joan Hess s psychiatric treatment. consent before They named the Fund as a defendant pursuant to Wis. Stat. § 655.27(5)(a)2. ¶7 Hess retained an attorney for the malpractice claim, but did not contract with him on an hourly basis. Instead, they agreed to pay him on a contingent fee basis, which would amount to thirty-three and one-third percent (33 1/3%) of any 4 Decker settled the claim filed dismissed from the case with prejudice. 4 against her and was No. 03-0327 "lump sum amount" recovered after the commencement of trial. Fernandez and Decker each obtained separate representation. However, nearly 18 months into the lawsuit, Fernandez s counsel assumed additional representation for the Fund. ¶8 On September 2, 1999, a jury returned a verdict for Hess on the medical malpractice claims, finding that Fernandez had negligently treated Joan Hess and failed to obtain informed consent for her treatment. The jury awarded plaintiffs $861,538.46 in damages, including $450,000 for Joan Hess. The remainder was awarded to her husband and children for derivative claims. ¶9 to After the verdict, Hess moved to amend the pleadings recover costs and reasonable Wis. Stat. § 51.61(7)(a).5 actual attorney fees under Hess alleged that because Fernandez denied her prompt and adequate treatment, as guaranteed under § 51.61(1)(f),6 5 they qualified to receive payment under Wisconsin Stat. § 51.61(7)(a) states, in relevant part: Any patient whose rights are protected under this section who suffers damage as the result of the unlawful denial or violation of any of these rights may bring an action against the person. . . . The individual may recover any damages as may be proved, together with exemplary damages of not less than $100 for each violation and such costs and reasonable actual attorney fees as may be incurred. 6 Wisconsin Stat. § 51.61(1)(f) states that each patient shall: [h]ave a right to receive prompt and adequate treatment, rehabilitation and educational services appropriate for his or her condition, under programs, services and resources that the county board of 5 No. § 51.61(7)(a). Although their original pleadings 03-0327 did not include a claim under § 51.61, the circuit court granted the motion,7 concluding that Fernandez had violated Joan Hess s right to adequate treatment based on the jury s finding of negligence. However, the amount of costs and fees was to be determined at a later date. ¶10 motion, After it attorney the awarded fees under circuit Hess court granted $911,409.81 in the post-verdict reasonable Wis. Stat. § 51.61(7)(a), actual reducing the request by the time Hess's attorneys spent on derivative claims and other matters. The court also awarded Hess costs in the amount of $295,567.43, minus statutory costs that had already been paid. the actual The court instructed the parties either to determine amounts based on the decision or to mediate. Ultimately, the court entered a judgment on the § 51.61(7)(a) claim for Hess in the amount of $1,250,576.73, which included supervisors is reasonably able to provide within the limits of available state and federal funds and of county funds required to be appropriated to match state funds. 7 The motion for costs and reasonable actual attorney fees under Wis. Stat. § 51.61(7)(a) never directly asked the court to amend the pleadings pursuant to Wis. Stat. § 802.09(2). However, the circuit court treated the motion as one for an amendment in its decision to award costs and reasonable actual attorney fees. 6 No. 03-0327 the costs and reasonable actual attorney fees in pursuing the post-verdict motion to amend.8 ¶11 Fernandez and the Fund were unsuccessful in motions for reconsideration. to this court. in the The court of appeals certified the issues We accepted certification of all issues raised certification from the court of appeals, and we now reverse for the reasons set forth herein. II ¶12 The first issue that we address is whether the circuit court erred in allowing Hess to amend the original pleadings to include a claim for costs and reasonable actual attorney fees under Wis. Stat. § 51.61(7)(a). Such a decision by the circuit court a to grant leave to amend complaint is discretionary. Finley v. Culligan, 201 Wis. 2d 611, 626, 548 N.W.2d 854 (Ct. App. 1996). A court misused its discretion if the court failed to exercise its discretion, the facts do not support the court's decision, or the court applied the wrong legal standard. Id. On review, we will not upset a discretionary decision unless such discretion was erroneously exercised. County, (1979). 90 Wis. 2d 823, 834, Stanhope v. Brown 280 N.W.2d 711 A circuit court has properly exercised its discretion when it has "examined the relevant facts, applied a proper legal standard, and, using a demonstrated rational process, reached a 8 On October 7, 2002, Hess filed a motion for an award of interest under Wis. Stat. § 807.01. The circuit court denied their motion on December 12, 2002. On July 29, 2004, Hess filed a cross-appeal of that ruling. 7 No. reasonable conclusion." 03-0327 Martindale v. Ripp, 2001 WI 113, ¶28, 246 Wis. 2d 67, 629 N.W.2d 698 (citations omitted). ¶13 When reviewing the legal standard in this case, we look first to Wis. Stat. § 802.09(2). This subsection, along with § 802.09(1),9 sets forth the applicable standards for the circuit court to apply in deciding if an amendment conforms to the evidence: If issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to so amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice such party in maintaining the action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence. Wis. Stat. § 802.09(2). the parts 9 of the For our review, we interpret each of statute as governing separate factual Wisconsin Stat. § 802.09(1) states, in relevant part: Amendments. A party may amend the party's pleading once as a matter of course at any time within 6 months after the summons and complaint are filed or within the time set in a scheduling order under s. 802.10. Otherwise a party may amend the pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given at any stage of the action when justice so requires. 8 No. scenarios. State v. Peterson, 104 Wis. 2d 616, 03-0327 629, 312 N.W.2d 784 (1981). ¶14 The first part of subsection (2) addresses a scenario where the unpleaded issues are tried by the express or implied consent of the parties. Zobel v. Fenendael, 127 Wis. 2d 382, 387, 379 N.W.2d 887 (Ct. App. 1985). We have interpreted this first section of the subsection to be mandatory. Wis. 2d at 629. Peterson, 104 If there is a determination that the issue was tried by the express or implied consent of the parties, the court must amend the presented at trial. pleadings Id. to conform with the proof To determine implied consent, the court must use the test of actual notice, and if it finds no actual notice, it should find no implied consent to try the unpleaded issue. Id. at 634. If, on the other hand, the circuit court finds that there was no consent to the trial of the unpleaded issue, it must apply a balancing test and make an "interests of justice" determination. Zobel, 127 Wis. 2d at 390. ¶15 where the The second part of the statute addresses a scenario evidence presented at trial was objected failing to be included in the original pleadings. to for Id. at 388. This section of the statute grants the circuit court discretion to allow amendments. See Wis. Stat. § 802.09(2). In fact, the statute encourages the circuit court to amend liberally when presentation of the merits of the action is at stake, and if the objecting party fails to show that the amendment prejudicial to its continued maintenance of the case. 9 would Id. be No. ¶16 The second part appear to apply here.10 of Wis. Stat. § 802.09(2) 03-0327 does not Because there is nothing in the record which demonstrates that Fernandez and the Fund objected to any evidence presented under Wis. Stat. § 51.61(7)(a), it seems clear that this case must be resolved under the first part of the subsection, as well as under § 802.09(1). ¶17 Hess makes three arguments as to why the circuit court correctly granted its motion for costs and reasonable actual attorney fees. First, sufficient as drafted. Hess argues that the complaint was Because Wisconsin is a notice pleading state, Hess argues that there was no requirement to set forth specifically each claim in the original complaint, but rather that a complaint requires only one cause of action.11 Second, Hess relies on the circuit court's decision that Fernandez and the Fund had given implied consent, as the elements of the Wis. Stat. § 51.61 claim were "fully aired" during the trial. Finally, Hess argues that Fernandez and the Fund failed in their burden of proving prejudice, as they did not sufficiently identify any hardship resulting from the amended § 51.61(7)(a) claim. Hess also argues that Fernandez and the Fund had 10 Hess argues that the Fund could not have shown prejudice under either the first or second part of Wis. Stat. § 802.09(2), and that, regardless of which part is selected, the amendment should stand. 11 Although we recognize that Wisconsin does not require heightened specificity in pleadings, we do not accept Hess's argument that a party never needs to plead a claim for attorney fees, which requires the proof of different elements, in a claim for medical malpractice. 10 No. 03-0327 opportunities to respond to the motion for costs and reasonable actual attorney fees, and that the failure to make such a response cannot now equate to prejudice. ¶18 Fernandez and the Fund, on the other hand, urge us to follow the interpretation of both Peterson and Zobel, and hold that the circuit court applied the wrong allowing the amendment of the complaint. the circuit Specifically, court they erred argue in that legal standard in They first argue that finding because implied they did not consent. receive actual notice that evidence was being presented on the unpleaded issue, there could not have been implied consent. Next, Fernandez and the Fund argue that the circuit court focused on whether they met their burden on prejudice, and neglected to consider, among other matters, why Hess delayed bringing a claim under Wis. Stat. § 51.61(7)(a) for four years. Additionally, Fernandez and the Fund claim that the circuit court was wrong and that they were in fact prejudiced. ¶19 In our analysis of address the issue of consent. that Fernandez express consent and the to try Wis. Stat. § 51.61(7)(a). be that which "may be Fund the Wis. Stat. § 802.09(2), we first Here, the record is quite clear did not provide unpleaded Hess issues with contained any in We have identified express consent to given by stipulation, or may be incorporated in a pre-trial order and rarely raises any serious fact question." omitted). We, Peterson, 104 Wis. 2d at 630, n. 17 (citation along consent was given here. with the parties, agree that no such Therefore, if Fernandez and the Fund 11 No. 03-0327 consented to the trial of costs and reasonable actual attorney fees, the consent must be implied. See Peterson, 104 Wis. 2d at 630. ¶20 As stated above, the determination of whether a case was tried by implied consent is to be made by the circuit court. In this case, the circuit court held that there was implied consent, because the elements of the Wis. Stat. § 51.61(7)(a) claim, at least as to violation of the standard of care, were fully addressed at trial. The court articulated that the elements of a § 51.61(7)(a) claim would require proof that Joan Hess was a "patient" receiving services for mental illness, that her rights under § 51.61 were unlawfully denied or violated, and that she suffered violation. adequate damages as a result of such denial or It concluded, therefore, that Joan Hess's right to treatment was violated, because the jury found negligence based on Fernandez's failure to exercise reasonable care. Thus, the court was satisfied that the elements, at least as to the violation of the standard of care, were "fully aired" during the trial, and the amendment satisfied Wis. Stat. § 802.09(2). ¶21 From our review of the record, we disagree with the circuit court and conclude as a matter of law that there was no implied actual consent, notice of since the Fernandez unpleaded conclusion, we look to Peterson. implied consent exists where and the issue. Fund For did support not have on this In that case, we held that there is no objection to the introduction of evidence on the unpleaded issue and where the 12 No. party not objecting unpleaded issue. is aware that the evidence 03-0327 goes Peterson, 104 Wis. 2d at 630. to the Thus, actual notice to the parties is the key factor in determining if there was implied consent. Id. Because we assume that relevant evidence was admitted here without timely objection, we must review the record to determine if Fernandez and the Fund had actual notice that the claim by Hess for costs and reasonable actual attorney fees was being raised during trial. ¶22 We cannot conclude that, because See id. the jury found negligence as to the standard of care, Fernandez and the Fund were fully aware that Hess was also trying a claim under Wis. Stat. § 51.61(1)(f), and that they could be liable for over $1 million in costs and reasonable actual attorney fees under § 51.61(7)(a). The circuit court erred when it failed to analyze the implied consent issue in terms of actual notice. It found that the issue was "fully aired," at least as to the violation of the standard of care, simply because it concluded a commonality of proof between the pleaded and unpleaded claims. The circuit court, despite finding implied consent without considering actual notice, pointed out matters that clearly lead to a determination of no actual notice: "[T]here was no specific prayer for relief under sec. 51.61(7), no discussion of which the court was aware of an award under that section until the filing of plaintiff's motion Number 1, and no request for instruction or inclusion of a specific verdict question as to sec. 51.61(7)." We therefore hold, as a matter of law, that under the circumstances presented here, there was not a valid 13 No. 03-0327 determination that there was implied consent, since Fernandez and the Fund did not have actual notice. "The reasoning behind this view is sound since if evidence is introduced to support basic issues that already have been pleaded, the opposing party may not be conscious of its relevance to issues not raised by the pleadings unless that fact is made clear." 6 C. Wright & A. Miller, Federal Practice & Procedure, § 1493 at 32-35 (1990). ¶23 not give Although we conclude that Fernandez and the Fund did any consent to trial of the unpleaded analysis of Wis. Stat. § 802.09 is not complete. issue, our In Peterson, we decided to utilize a balancing approach in regard to the interests of the party benefiting from, and those of the party objecting to, the implied consent.12 127 Wis. 2d at amendment, separate from the analysis of Peterson, 104 Wis. 2d at 632; see also Zobel, 891. Therefore, the circuit court has to determine if such an amendment is in the "interests of justice." Such analysis consideration of of the "interests prejudice. of justice" Peterson, 104 often involves Wis. 2d at 635. However, the United States Supreme Court in Foman v. Davis, 371 12 In Peterson, this court noted that some federal courts had chosen to use a different test, in place of actual notice, to determine if there was implied consent. This alternative test, applied to amendments arising under Fed. R. Civ. P. 15(b), was invoked to determine whether the defendant was prejudiced. Ultimately, we held that the best approach for Wis. Stat. § 802.09(2) would be to treat the concepts of implied consent and prejudice separately. Thus, if the court determines that there was no implied consent, it may sua sponte under sec. 802.09(1)(2) amend the pleadings to conform to the evidence if it is in the "interests of justice." State v. Peterson, 104 Wis. 2d 616, 634, 312 N.W.2d 784 (1981). 14 No. 03-0327 U.S. 178 (1962), held that the balancing test also can take into account a variety of factors including undue delay, motive, and prejudice. ¶24 Foman, 371 U.S. at 182. When determining the "interests of justice," we agree with the court of appeals' decision in Zobel that such a review presents a question of law.13 Zobel, 127 Wis. 2d at 391. therefore of the review the decision circuit although benefiting from its analysis. court de We novo, Meriter Hosp., Inc. v. Dane County, 2004 WI 145, ¶12, ___ Wis. 2d ___, 689 N.W.2d 627. ¶25 Here, the circuit court concluded that Fernandez and the Fund did not meet the burden of proof as to prejudice. The court denied the argument that there was prejudice because of the lack of notice of the remedy sought. It reiterated that because the claim was "fully aired" during trial, Fernandez and the Fund could not prove prejudice as to the lack of notice. On appeal, Hess seeks to uphold this ruling. ¶26 Fernandez and the Fund, on the other hand, make multiple arguments in opposition to the circuit court's holding that the justice." pleadings could be amended in the "interests of They argue that the circuit court erred by focusing almost exclusively on prejudice. While prejudice is clearly a factor to be considered in applying this standard, they claim 13 The court in Zobel correctly acknowledges that the issue can, in other contexts, present a mixed question of law and fact. However, in cases such as this, where our review is limited to the undisputed facts of the record, the only question remaining is decided as a matter of law. Zobel v. Fenendael, 127 Wis. 2d 382, 391, 379 N.W.2d 887 (Ct. App. 1985). 15 No. 03-0327 that the court should also look to other factors, such as undue delay and improper motive, and "balance the interests of the party benefiting objecting to by the the amendment amendment." and those Peterson, 104 of the party Wis. 2d at 634. They conclude that while no one factor is dispositive in this balancing test, the circuit court erred in failing to apply the "interests of justice" standard properly. ¶27 In Peterson and Zobel, the courts held that the party objecting circuit the the court evidence. to to amendment offered could an not claim opportunity to prejudice offer Id. at 639; Zobel, 127 Wis. 2d at 391 n.8. motion for costs and reasonable actual if the additional In regard attorney fees under Wis. Stat. § 51.61(7)(a) in this case, Fernandez and the Fund never had the opportunity to present their positions on these matters at trial and have them heard by the jury. The parties apparently had an opportunity to brief the issue, take depositions, and retain experts, but this occurred in a postverdict motion hearing. Being unable to present its position at trial and, thus, heard by the trier of fact may be prejudicial to the party objecting to the motion. ¶28 Furthermore, we are not blind to the unfairness inherent in permitting an amendment at such a late hour. See DRR, L.L.C. v. Sears, Roebuck & Co., 171 F.R.D. 162, 168 (Del. 1997). We agree with Fernandez and the Fund that in order to determine the "interests of justice," we must consider in the balance several more factors. our "interests of In Peterson, we were able to make justice" 16 determination without much No. 03-0327 difficulty, because the court amended the complaint sua sponte, and did not give the objecting party any time to respond.14 However, we did not hold that this was the only situation in which a court can find that an amendment is not within the "interests of justice." Thus, when we balance the interests of both parties, as Peterson requires, we agree with Fernandez and the Fund that the circuit court should have considered such factors as undue delay and the motive of the moving party, as well as whether prejudice resulted for the Fund and Fernandez. ¶29 We find support for this approach from federal cases. Under the Federal Rules of Civil Procedure 15(a),15 the federal counterpart to Wis. Stat. § 802.09(1), federal courts have leave 14 Although Peterson applied to an amendment made by the court sua sponte, the court of appeals in Zobel, 127 Wis. 2d at 390-91 n.7, correctly held that there is no reason why the rationale of Peterson could not apply to cases where a party has moved to amend the complaint. See Wheeler v. Gen. Tire & Rubber Co., 142 Wis. 2d 798, 817, 419 N.W.2d 331 (Ct. App. 1987). This is a logical extension, especially because our analysis in Peterson was also based on Wis. Stat. § 802.09(2), which governs a motion made by parties, not by the court. Zobel, 127 Wis. 2d at 390 n.7. 15 Rule 15(a) states, in relevant part: (a) Amendments. A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. 17 No. to amend a pleading "when justice so requires."16 expanded the interpretation of "interests of 03-0327 Courts have justice" beyond prejudice, however, and held that among the adequate reasons for denying delay, leave bad to amend faith movant. . . ." or under such dilatory circumstances motive on the are part "undue of the Foman, 371 U.S. at 182; Viernow v. Euripides Dev. Corp., 157 F.3d 785, 799 (10th Cir. 1998) ("we 'have often found untimeliness alone a sufficient reason to deny leave to amend'") (citation omitted); DRR, L.L.C., 171 F.R.D. at 167 ("a movant who offers no adequate explanation for its delay will ordinarily be denied leave to amend"); Zahra v. Town of Southold, 48 F.3d 674, 686 (2d. Cir. 1995) ("It was entirely reasonable for the district court to deny a request to amend a complaint that was filed two and one-half years after the commencement of the action"); Perrian v. O'Grady, 958 F.2d 192, 194 (7th Cir. 1992) ("'the longer the delay, the greater the presumption omitted). cases against granting leave to amend'") (citations We see no reason not to extend this rationale to requiring "interests of 16 justice" determinations under When we formulated the "interests of justice" determination in Peterson, we used language from Rule 15(a), as well as Rule 15(b). We held that the circuit court may "under sec. 802.09(1)(2) amend the pleadings to conform to the evidence if the circuit court concludes that justice so requires." Peterson, 104 Wis. 2d at 634. This court in Peterson denied the amendment because we specifically determined that the objecting party was unfairly deprived of his opportunity to meet the issue and, therefore, prejudiced. As a result, we had no need to consider other factors upon which a court could deny leave to amend in the "interests of justice." 18 No. § 802.09(1). 03-0327 Accordingly, we hold that in situations such as this, where the amendment was not brought until after the jury verdict, and four years after the original pleadings were filed, the delay is a significant factor in applying the balancing test. ¶30 It is also argued that Hess had a dilatory motive in moving for amendment of the complaint. Hess did not move to amend the claim for costs and actual attorneys fees until after the jurors determined $1,052,426.17, which their is award. Hess's considerably more motion than the requested sum of $149,985, which was the amount that Hess's attorney had agreed to accept based on the contingent fee agreement. ¶31 Although Hess attempts to refute any allegation of improper motive, the argument seems to be of questionable merit. Hess contends that because a post-verdict motion for attorney fees was allowed in Gorton v. American Cyanamid Co., 194 Wis. 2d 203, 232, 533 N.W.2d 746 (1995), that the motion here should not be considered untimely and, thus, improper. In that case, we allowed a post-verdict motion for attorney fees under Wis. Stat. § 100.18. There were allegations that the defendant engaged in false and misleading advertising that resulted in pecuniary loss to the plaintiffs. Id. at 232. We held that these allegations were exactly the type of allegations that fall within the purview of § 100.18. Id. That case is distinguishable, however, because there was clear evidence of implied consent during trial from the party objecting to the amendment. The reason that this court allowed the post-verdict 19 No. 03-0327 motion for attorney fees in Gorton was because the claim was "fully aired" at trial, the party objecting had actual notice. ¶32 of Fernandez and the Fund argue that the plain language Wis. Stat. § 51.61(7)(a) limits fee recovery to "actual attorney fees . . . incurred." Yet, as noted, Hess now claims fees than and costs contingent fee much greater agreement between those Hess and permitted counsel, by the and thus greater than the reasonable actual attorney fees incurred. ¶33 We conclude that the circuit court erroneously exercised its discretion in granting Hess's motion to amend the pleadings under either the theory balancing test to the related of implied "interests of consent or justice." the The circuit court should have considered factors other than just prejudice and should have given much more weight, in applying the balancing test, to the delay in bringing the motion to amend, the motive of the moving party, as well as the prejudice to Fernandez and the Fund, resulting from the hourly fee claim, and the lack of opportunity to present their positions at trial. It appears obvious that Fernandez and the Fund had relied on the fact that there was a contingent fee agreement involved here. III ¶34 In light of our holding above, there is no need to address the remaining issues certified by the court of appeals, except the question of the Fund's liability in regard to future claims for costs and reasonable Wis. Stat. § 51.61(7)(a). 20 actual attorney fees under No. 03-0327 ¶35 The legislature established the Fund when it enacted Wis. Stat. ch. 655 in 1975, in response to medical malpractice concerns. Wis. Patients Comp. Fund v. WHCLIP, 200 Wis. 2d 599, 606-07, 547 N.W.2d 578 (1996). The legislature created a new system for processing medical malpractice claims and created the Fund in order to "finance a portion of the liability incurred by health care providers in medical malpractice actions." Id. at 607. ¶36 to In order to determine if the Fund's financing applies claims brought under Wis. Stat. ch. 51 for violation patients rights, we must examine Wis. Stat. § 51.61. of Again, we hold that the interpretation of a statute presents a question of law, which we review de novo. Meriter, ___ Wis. 2d ___, ¶12-13; see also State v. Williams, 198 Wis. 2d 516, 525, 544 N.W.2d 406 (1996). Although we consider this question independent of the decision of the circuit court, we nevertheless benefit from its analysis. Meriter, ___ Wis. 2d at ___, ¶12-13; Meyer v. Sch. Dist. of Colby, 226 Wis. 2d 704, 708, 595 N.W.2d 339 (1999). ¶37 Our main objective in statutory interpretation "is to determine what the statute means so that it may be given its full, proper, and intended effect." State ex rel. Kalal v. Circuit Court, 2004 WI 58, ¶44, 271 Wis. 2d 633, 681 N.W.2d 110. As a result, the court's analysis should begin with the plain language of the statutory text. Id., ¶45. If the language of the statute is clear on its face, then we should apply the statute using the common and generally accepted meanings of the terms. Meriter, ___ Wis. 2d ___, 21 ¶13. Thus, with an No. 03-0327 unambiguous statute, we need not consult any extrinsic sources. Id. (citing Kalal, 271 Wis. 2d 633, ¶46). ¶38 In addressing Wis. Stat. § 51.61, the circuit court held that claims for costs and reasonable actual attorney fees can apply to the Fund. For support, it looked to the court of appeals' decision in Wright v. Mercy Hospital, 206 Wis. 2d 449, 557 N.W.2d 846 (Ct. App. 1996). There, a patient brought suit against a nurse, hospital, and the hospital's insurer, after a nurse at the hospital developed a sexual relationship with the patient. The nurse and the insurer settled, but the court of appeals determined that the patient was entitled to costs and reasonable actual attorney fees from the hospital under § 51.61. The court of appeals allowed an award under a § 51.61 claim, even though the hospital was a corporation. The circuit court here held that the result in the Wright case gave tacit support to the statute's applicability to the Fund in this case. ¶39 We disagree with the circuit court's interpretation and its application of Wis. Stat. § 51.61 to the Fund. The Fund is clearly not a person "who violates the right in question," as § 51.61 requires. The Fund does not provide any treatment and could never violate any of the rights proscribed in § 51.61. As a result, there is no basis to conclude that it is subject to costs and reasonable actual attorney fees. ¶40 In so holding, we must clarify the court of appeals' decision in Wright, even though the chief holding in that case can be distinguished. Wis. Stat. § 51.61 claims While the could 22 hospital apply to it implied or its that no insurer No. 03-0327 because they were corporations, that issue was not addressed by the court because the argument was not developed. Wis. 2d at 449. Wright, 206 The court of appeals also did not consider, in Wright, the issue of Wis. Stat. ch. 655 exclusivity. of appeals should have put much greater The court emphasis on the relationship between the contingent fee agreement and the claim for costs and reasonable actual attorney fees. When applying the be balancing test, such a factor should carefully considered. ¶41 As previously noted, the liability of the Fund does not extend to person under Wis. Stat. § 51.61(7)(a), since the Fund is not a the plain language of that statutory section. Since we have determined that the Fund does not come within the plain language of § 51.61(7)(a), we need not determine whether the Fund's arguments concerning "damages" and the exclusivity of Wis. Stat. ch. 655 to the Fund are correct. It is enough for our purposes here that we find that the Fund is not a person within the meaning of § 51.61(7)(a) and, therefore, not subject to the provisions relating to costs and reasonable actual attorney fees. ¶42 Because we determine erroneously granted and that subject an costs to award of that the Fernandez and motion and the reasonable to amend was Fund are not actual attorney fees, we need not address the question of interest on such an award. IV 23 No. ¶43 03-0327 In sum, we conclude that the circuit court erroneously exercised its discretion by granting the motion to amend the pleadings to include determine that Fernandez or there the Hess's new was express Fund no to try claim. the or In doing implied issues so, we consent by raised by the Wis. Stat. § 51.61 claim, and that the circuit court did not properly apply the balancing test when it allowed the amendment of the pleadings. the amendment, Additionally, we hold that, irrespective of the Fund cannot be liable for reasonable actual attorney fees under § 51.61(7)(a). costs and The Fund is not a "person," and therefore is incapable of violating any rights of a patient under the statute. By reversed, the and Court. The the cause judgment is of remanded the for circuit further consistent with this opinion. ¶44 ANN WALSH BRADLEY, J., did not participate. 24 court is proceedings No. ¶45 affirm (dissenting). SHIRLEY S. ABRAHAMSON, C.J. the judgment of the circuit 03-0327.ssa I would court. The plaintiffs' complaint requested an award of costs and fees and such further relief as the court may find proper. The complaint did not set forth a specific prayer for relief under Wis. Stat. § 51.61(7). ¶46 I conclude that the circuit court properly exercised its discretion in granting the post-trial motion to amend the pleadings to include a claim for fees and costs. The burden of proof was on the defendants to show prejudice. They have not carried their burden. ¶47 312 We held in State v. Peterson, 104 Wis. 2d 616, 634, N.W.2d 784 (1981), that the circuit court has "wide discretion regarding amendment of the pleadings to ensure that the entire controversy is presented and to ensure that the party opposing the amendment is not unfairly deprived of the opportunity to meet the issue created by the amendment." ¶48 The majority opinion fails to allow the circuit court any discretion, let alone wide discretion, regarding the posttrial amendment of the pleadings. Furthermore, the majority opinion does not determine prejudice but rather decides the case in "the interests of indicia of prejudice. justice," thus looking far afield for The most important factor in deciding when leave to amend may be denied in both pre- and post-trial motions to amend is whether the opposing party will be prejudiced.17 17 6 Charles Alan Wright et al., Federal Procedure: Civil 2d § 1487 at 612-13 (1990). 1 Practice and No. ¶49 03-0327.ssa As the Peterson court explained, prejudice does not mean that the party suffers a substantive harm but rather means that the party "was deprived of an opportunity to defend against the amended charge."18 The majority opinion ignores the facts and the circuit court's decision that the defendant had a full opportunity to defend against the amended charge, which had the same elements and proof as the original charge. Instead, the majority opinion stresses that here the defendants did not know they could be liable for over $1 million in costs and reasonable actual attorney fees.19 ¶50 The majority opinion despairs that attorney fees and costs were not presented to the jury.20 Yet attorney fees are determined only after a successful termination of the underlying claim.21 And here the parties had the opportunity to brief the issue of fees and costs, take depositions, and retain experts.22 ¶51 The circuit court carefully explored the facts and law applicable to the issue. standard of care The circuit court concluded that the applicable to both the allegations in the complaint and the amended pleadings was fully aired and that the defendants made no offer of proof that additional evidence could 18 Peterson, 104 Wis. 2d at 635. 19 Majority op., ¶22. 20 Id., ¶27. 21 See Gorton v. Am. Cyanamid Co., 194 Wis. 2d 203, 230, 533 N.W.2d 746 (1995). 22 Majority op., ¶27. 2 No. have been presented pleadings. ¶52 cannot had they been aware of 03-0327.ssa the amended Accordingly, the defendants were not prejudiced. Try as the distinguish present case. might,23 majority Gorton v. American the majority Cyanamid Co. opinion from the Gorton was a negligent misrepresentation case tried before a jury. The court permitted the pleadings to be amended post-verdict to add a statutory misrepresentation claim pursuant to Wis. attorneys' fees. the allegations Stat. § 100.18 that permitted recovery of The Gorton court allowed the amendment because underlying both claims were fully aired at trial, the defendant was not prejudiced, and no other evidence could have been presented during trial to rebut the amended claim that was already at issue based on the complaint.24 The Gorton court allowed attorneys fees and costs to be determined post-verdict. I view Gorton as on all fours with the present case. ¶53 For the reasons set forth, I conclude that the circuit court judgment should be affirmed. The circuit court did not erroneously exercise its discretion. ¶54 I do not join the majority opinion regarding the Fund's liability for costs and reasonable actual attorney fees because the majority has delivered opinion. 23 Majority op., ¶31. 24 Gorton, 194 Wis. 2d at 232-33. 3 an unnecessary advisory No. 4 03-0327.ssa No. 1 03-0327.ssa

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