Abuse of Discretion – Attorney’s Fees

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WI Supreme Court

Case Name: Nationstar Mortgage LLC n/k/a Bank of America v. Robert R. Stafsholt, et al.

Case No.: 2018 WI 21

Focus: Abuse of Discretion – Attorney’s Fees

This is a review of an unpublished, per curiam decision of the court of appeals reversing the St. Croix County Circuit Court’s order awarding attorney fees and costs to Robert Stafsholt (“Stafsholt”) and against Nationstar Mortgage LLC (“Nationstar”) on the basis of equitable estoppel. Nationstar Mort. LLC v. Stafsholt, No. 2015AP1586, unpublished slip op. (Wis. Ct. App. Dec. 28, 2016) (per curiam).

Stafsholt raises two issues for our review. First, whether the circuit court properly awarded attorney fees to Stafsholt. Within this issue are two sub-issues: (a) whether circuit courts acting in equity possess the power to award attorney fees to prevailing parties in order to make them whole; and (b) if so, whether the circuit court properly exercised its discretion in this case. Second, whether the circuit court erroneously exercised its discretion in allowing Nationstar to collect interest on the principal amount of the loan during the default period.

We reverse the decision of the court of appeals. As to the first issue, circuit courts may include attorney fees as part of an equitable remedy “in exceptional cases and for dominating reasons of justice.” Sprague v. Ticonic Nat’l Bank, 307 U.S. 161, 167 (1939). The circuit court properly exercised its discretion because it applied the proper standard of law to the facts of record when it concluded that Bank of America acted in bad faith and then awarded attorney fees to Stafsholt.

As to the second issue, we hold that Nationstar may collect interest accrued during litigation because Stafsholt would receive a windfall if he was both excused from paying interest and received his attorney fees. We remand the matter to the circuit court for determination of the reasonable attorney fees Stafsholt incurred before the court of appeals and this court, and to then calculate the balance of the loan.

Reversed and Remanded

Concur:

Dissent:

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.