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Attorney Fees Case Analysis

The decision creates a narrow exception between the general rule that limits recovery of attorney’s fees to token amounts, and the usual exceptions that permit "reasonable attorney’s fees."

Attorney fees are governed by Section 814.04, which provides in relevant part: "Except as provided in secs. 93.20, 100. 30(5m), 106.50(6)(i) and (6m)(a), 115.80(9), 281.36(2)(b)1., 767.33(4)(d), 769.313, 814.025, 814.245, 895.035(4), 895.10(3), 895.75(3), 895.77(2), 895.79(3), 895.80(3), 943.212(2)(b), 943.245(2)(d) and 943.51(2)(b), when allowed costs shall be as follows:

(1) Attorney fees. (a) When the amount recovered or the value of the property involved is $1,000 or over, attorney fees shall be $100; when it is less than $1,000 and is $500 or over, $50; when it is less than $500 and is $200 or over, $25; and when it is less than $200, $15."

Every one of the statutes referenced in sec. 814.04 provides for "reasonable attorney fees," except for three: sec 93.20, which governs actions by the Department of Agriculture, Trade, and Consumer Protection, and provides for no attorney fees; sec. 100.30, the Unfair Sales Act, which provides for "costs, including … attorney fees"; and sec. 895.80(3), which was at issue in this case, and which actually makes no reference to attorney fees at all, but only refers to "All costs of investigation and litigation that were reasonably incurred."

The lack of explicit reference to attorney fees, in consideration with the various references to attorney fees in the other statutes excepted from sec. 814.04, makes it arguable that prevailing plaintiffs under the statute should not even be able to recover attorney fees actually incurred.

Such an argument could be further bolstered by the fact that sec. 895.80(3m)(b) provides that plaintiffs who prevail in enforcing a violation of sec. 943.01(2d) can recover, among other items, "the reasonable attorney fees incurred in litigating the action."

Notwithstanding the absence of any explicit reference to attorney fees, however, such an argument would fly in the face of common sense; why would the legislature permit "token" attorney fees for garden-variety civil actions, and deny them altogether for fraud actions?


Wisconsin Court of Appeals

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Attorney fees must actually
be incurred for award

Viewed in this light, the court’s limitation of attorney fees to those that are actually incurred is an interpretation that strikes a reasonable balance. Furthermore, it is consistent with federal court interpretations, as the court noted. 26 U.S.C. 7430(a)(2) has been interpreted to include attorney fees actually incurred, and contains language nearly identical to sec. 895.30(3)(b) — "reasonable litigation costs incurred."

As a result, attorneys representing plaintiffs seeking to enforce their rights pursuant to sec. 895.80 should carefully consider whether it is in their interest to accept such cases on a contingency fee basis.

By accepting this case on that basis, the attorney will presumably receive only $6,000 (40 percent of $15,000), although it was determined by the trial court that $22,000 would be a reasonable fee if the attorney was charging $150 per hour (and that was before the second appeal).

Even without counting the time spent on the second appeal, the attorney would therefore receive barely $40 per hour, a grossly inadequate amount.

– David Ziemer

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David Ziemer can be reached by email.

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