2008AP1605 Stewart v. Farmers Insurance Group

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Torts
Bad faith; attorney fees

A plaintiff who settles a bad faith claim cannot recover attorney fees in addition to the settlement.

"The Stewarts further assert that "if there were such a limitation, plaintiffs who are presented with an offer of judgment and thus did not wish to take a gamble on a trial, would be placed in a no-win situation." According to the Stewarts, if the plaintiffs accept the offer, they lose their right to recover fees having not obtained a judgment following a trial, and if they decline the offer, but fail to recover a greater amount at trial, they lose their right to recover costs and fees and are responsible for the insurer's costs. Given that attorney fees in a bad faith action are a type of damages, we agree with Farmers that the no-win situation the Stewarts claim will result is no different than that which is presented to plaintiffs in any other case involving an offer of judgment pursuant to Wis. Stat. § 807.01. As would be the choice put to plaintiffs in any bad faith, personal injury, or contract case, Farmers explains: 'Plaintiffs may choose to accept the offer if they believe that it adequately compensates them for their damages, which, in bad faith actions, include attorney fees. In the alternative, plaintiffs can reject the offer and seek to prove the damages at trial. In taking this chance, plaintiffs run the risk of having to pay defendants' costs if the plaintiffs fail to recover a more favorable judgment.' Furthermore, we see no reason why the Stewarts could not have sought to accept the offer of judgment with a reservation of their right to pursue actual attorney fees or proceeded in some other fashion that put Farmers on notice that they did not believe actual attorney fees were subsumed within the stated amount of the offer."

Affirmed.

Recommended for publication in the official reports.

2008AP1605 Stewart v. Farmers Insurance Group

Dist. I, Milwaukee County, DiMotto, J., Curley, J.

Attorneys: For Appellant: Stewart Martin, Trisha R., Milwaukee; For Respondent: O'Neil, Patrick A., Milwaukee

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