Abuse of Discretion – Attorney Fees

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WI Court of Appeals – District III

Case Name: Brian L. Sinkler, et al. v. American Family Mutual Insurance Company, et al.

Case No.: 2019AP88

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Abuse of Discretion – Attorney Fees

EMCASCO Insurance Company (“EMC”) appeals an order distributing the settlement proceeds in a third-party liability action filed under WIS. STAT. § 102.29 (2017-18). EMC argues the circuit court erroneously exercised its discretion by failing to distribute any portion of the reasonable cost of collection to EMC’s attorneys, the Ron Harmeyer Law Office LLC (“the Harmeyer firm”). In addition, EMC urges this court to adopt a per se rule that the attorney fees awarded as a reasonable cost of collection in a third-party liability action must be divided between the injured employee’s attorneys and the worker’s compensation carrier’s attorneys on a pro rata basis—that is, in proportion to their clients’ respective recoveries.

We conclude the circuit court properly applied the three-part framework set forth in Anderson v. MSI Preferred Insurance Co., 2005 WI 62, 281 Wis. 2d 66, 697 N.W.2d 73, when determining and apportioning the reasonable cost of collection in this case. Under the circumstances, the court did not erroneously exercise its discretion by refusing to distribute any portion of the reasonable cost of collection to the Harmeyer firm. We decline EMC’s invitation to adopt a per se rule requiring the pro rata distribution of the reasonable cost of collection. Accordingly, we affirm the order distributing the settlement proceeds.

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.