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Dissent casts doubt on attorney fees

The Wisconsin Court of Appeals held on Aug. 11 that a family court judge may award attorney fees to an attorney who withdrew from the case, even if no other attorney was substituted for her, and that the court can freeze a divorcing party’s investment account, to ensure that funds are available to pay the party’s attorney.

However, a dissent in the case casts doubt on the constitutionality of sec. 767.23(3)(a), and contends that clients have the right to a jury trial before attorneys can obtain fees under the statute.

Elizabeth J. Kohl and her husband, Richard Zeitlin, jointly initiated a divorce action. After Kohl’s original attorney withdrew, Nancy Wettersten of the firm of DeWitt Ross & Stevens (DeWitt) assumed her representation.

A judgment of divorce was entered, but custody and placement issues were reserved for trial. Before those issues were resolved, Wettersten moved to withdraw, and sought attorney fees pursuant to sec. 767.23(3)(a).

What the court held

Case: In re: Kohl v. Zeitlin, No. 2004AP328.

Issue: Must there be a "substitution" of attorneys in a divorce for a court to award attorney fees pursuant to sec. 767.23(3)(a)?

Holding: No. Attorney withdrawal is all that is required.

Counsel: Richard J. Auerbach, Madison, for appellant; Scott K. Petersen, Madison, for respondent.

Kohl did not object to withdrawal, but opposed the motion for fees. Dane County Circuit Court Judge Sarah B. O’Brien granted the motion for withdrawal, and reserved the issue of fees until after placement and custody were decided.

O’Brien also issued an order, pursuant to sec. 767.23(1)(h), that Kohl not permit a particular investment account to go below $15,000, in order to cover the fees that DeWitt was seeking.

Ultimately, the court awarded just over $15,000 in fees. Kohl appealed, but the court of appeals affirmed, in a decision written by Judge Margaret J. Vergeront, and joined by Judge Paul G. Lundsten. Judge Charles P. Dykman dissented.

Section 767.23(3)(a) provides: "Upon making any order for dismissal of an action affecting the family or for substitution of attorneys in an action affecting the family or for vacation of a judgment theretofore granted in any such action, the court shall prior to or in its order render and grant separate judgment in favor of any attorney who has appeared for a party to the action and in favor of any guardian ad litem for a party or a child for the amount of fees and disbursements to which the attorney or guardian ad litem is, in the court’s judgment, entitled and against the party responsible therefor."

Kohl argued that fees may only be awarded under the statute if another attorney is actually substituted for the attorney withdrawing, but the court found this interpretation unreasonable.

The court wrote, "While it may be that Kohl’s construction gives the term ‘substitution of attorneys’ its common meaning when the term is read in isolation, her construction is not reasonable when the term is considered in context and in light of the purpose of the paragraph. The manifest purpose of Wis. Stat. sec. 767.23(3)(a) is to provide an expeditious procedure for determining the amount of fees that attorneys in actions affecting the family (as well as guardians ad litem) are owed in the three identified situations. The Legislature has evidently made the policy decision that in these three situations there should be a procedure to facilitate the prompt determination and payment of fees owed."

The court continued, "The result of Kohl’s construction is unreasonable because it ties an attorney’s ability to obtain a judgment for attorney fees owed him or her to events wholly unrelated to any discernible purpose of the statute. Whether a client has another attorney ready to step in as soon as the first attorney withdraws, as opposed to proceeding pro se for a short time, as here, or for the entire action remaining, has no rational relationship to whether the first attorney should have available to him or her this expeditious manner of obtaining a judgment for attorney fees owed."

After holding that the hour-and-a-half hearing that the court held gave Kohl an adequate opportunity to be heard, and holding that the amount of fees were reasonable, the court turned to the freeze order, and upheld it, as well.

Subsection (1)(h) gives the court the authority "during the pendency" of an action affecting the family, to "prohibit[] … either party from disposing of assets within the jurisdiction of the court."

Kohl argued that the provision only protects each party from adverse actions by the other, not to protect attorneys, but the court disagreed, concluding, "no such limitation is even arguably apparent from the statutory language or the context of the statute."

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Case Analysis

The court declined to consider the constitutionality of sec. 767.23(3)(a) or whether fees were properly awarded for time spent obtaining the judgment against Kohl, because it found these issues were not properly raised.

Accordingly, the court affirmed.

Judge Dykman dissented, arguing that the court should have reached the constitutional issue, and concluding that subsec. (3)(a) violates the state constitutional right to a jury trial.

Dykman acknowledged that divorce in 1848 was an equitable action, rather than a legal one, to which there is no right to jury. However, he found the claim for attorney fees was a recognized action at law, to which the right to jury attached.

Dykman wrote: "I conclude that a suit for attorney fees was regarded as ‘at law’ in 1848 because it was a suit on contract or quasi-contract, and because such a suit seeks money damages. Both prongs of the analysis of an asserted article I, sec. 5 right to a jury trial having been met, I would reverse and remand to permit the trial court to empanel a jury to hear Kohl’s defenses to DeWitt, Ross and Stevens’s claim for attorney fees."

Click here for Case Analysis.

David Ziemer can be reached by email.

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