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COURT OF APPEALS DECISION DATED AND RELEASED December
20, 1995 |
NOTICE |
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A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals. See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 94-2718
STATE OF WISCONSIN IN
COURT OF APPEALS
DISTRICT II
JAMES
P. BRENNAN,
d/b/a
BRENNAN & COLLINS,
Plaintiff-Appellant,
v.
TIMOTHY
T. KAY, THOMAS J. KAY,
TOD A.
WANTA, KAY & KAY,
Attorneys
at Law,
ABC
INSURANCE COMPANY,
SUSAN
BROWN, JANE JONES,
BROWN
& JONES REPORTING, INC.
and
XYZ INSURANCE COMPANY,
Defendants-Respondents.
APPEAL
from an order of the circuit court for Waukesha County: ROGER MURPHY, Judge. Affirmed but cause remanded with directions.
Before
Anderson, P.J., Brown and Nettesheim, JJ.
PER
CURIAM. James P.
Brennan appeals from an order dismissing his complaint alleging abuse of
process and fraud in the commencement of a garnishment proceeding against
him. He argues that it was error for
the trial court to grant summary judgment upon the defendants' motion to
dismiss, that the trial court did not provide him with an opportunity to
undertake discovery or respond to the motion, and that it was error to conclude
that the action was frivolous under § 814.025, Stats. We conclude
that the trial court properly treated the motion to dismiss as one for summary
judgment and that Brennan was provided an adequate opportunity to respond. We affirm the order dismissing the complaint
and finding the action to be frivolous.
We remand the action to the trial court for a determination of the
reasonable attorney's fees and costs to be awarded against Brennan for bringing
a frivolous appeal.
The
background of this controversy is lengthy as a result of Attorney Brennan and
Attorney Timothy T. Kay flaunting their legal prowess.[1] On March 17, 1994, a judgment was entered
against Brennan in favor of Brown & Jones Reporting, Inc. in the amount of
$3394.20 for unpaid court reporting fees and the taxable costs and
disbursements of the collection action.
That judgment has been affirmed except to the extent that it awards
judgment against both Brennan and the law firm of Brennan & Collins as a
partnership. Brown & Jones
Reporting, Inc. v. James P. Brennan, et al., No. 94-1118,
unpublished slip op. at 4 (Wis. Ct. App. Dec. 6, 1995). The judgment has been remanded for entry of
the judgment against James P. Brennan personally. Id.
Kay
and the law firm of Kay & Kay represented Brown & Jones in the
collection action against Brennan. A
garnishment action for the full amount of the judgment was filed
against Brennan on March 23, 1994. This
caused $3437.20 to be withdrawn from Brennan's bank account on March 24, 1994,
to be held by the bank until further order of the court. On March 31, 1994, an amended garnishment
complaint was filed seeking to collect the balance of the judgment due after
crediting Brennan for a $2900 payment; that balance was $552.20.
Brennan
commenced this action on April 1, 1994, alleging that the garnishment action
was an abuse of process because a $2900 check payable to Brown & Jones had
been submitted to Kay on March 16, 1994.
He alleged that the garnishment action had been brought for the purpose
of harassing and embarrassing Brennan and his associates, to obstruct their
business operation, and to punish Brennan for taking an appeal to challenge the
unpaid amount of the judgment. He also
sought punitive damages for the alleged fraud perpetrated by the representation
in the garnishment complaint that the full amount of the judgment was unpaid
when in fact $2900 had been paid.
In
response to the complaint, Kay filed a motion on behalf of all the defendants
to change venue from Milwaukee County and in the alternative to dismiss the
action. On May 20, 1994, an order was
entered changing venue to Waukesha County and staying discovery pending an
order of the Waukesha County court.
When
the matter came on for hearing on September 1, 1994, pending was Brennan's
motion for default judgment for the defendants' failure to file an answer or,
in the alternative, for an order setting aside the order which stayed all
discovery proceedings; the defendants' motion to consolidate the action with
the garnishment action; and the defendants' motion to dismiss the action which
was filed on August 22, 1994. The trial
court determined that Kay had acted in good faith with no abuse of process,
that there was no fraud and that there was no damage to Brennan. The motions for default judgment, to lift
the stay on discovery and to consolidate the action were denied as moot.
After
entry of the order dismissing the action, the defendants filed a motion seeking
costs and attorney's fees under § 814.025, Stats., for a frivolous action. Brennan responded with a motion for reconsideration, which was
denied. The trial court found that the
action was meritless, that Brennan knew or should have known it was meritless
and that the action was commenced for the purpose of continuing this matter
"ad nauseam" to harass and antagonize Kay's law firm. Brennan was ordered to pay $3378.78 in
attorney's fees.
There
is no doubt that the trial court treated the motion to dismiss brought under
§ 802.06(3), Stats., as one
for summary judgment. It was authorized
to do so. Id.[2] See also Envirologix Corp. v.
City of Waukesha, 192 Wis.2d 277, 286-87, 531 N.W.2d 357, 362 (Ct. App.
1995).
Brennan
argues that error occurred when the court converted the motion at the start of
the hearing and decided it without providing him a reasonable opportunity to
present relevant material as required by § 802.06(3), Stats. Brennan's
suggestion of surprise at the treatment of the motion as one for summary
judgment is incredible. In a letter to
the trial court two days before the motion was heard, Brennan acknowledged that
the motion to dismiss was "tantamount to a motion for summary
judgment." It was not error for
the trial court to treat the motion as one for summary judgment.[3] See Envirologix, 192
Wis.2d at 287, 531 N.W.2d at 362 (trial court properly treats motion to dismiss
as one for summary judgment where party contributes to court's decision to use
that methodology).
Further,
Brennan had the opportunity to file materials in opposition to the motion. In fact, he did so. On April 19, 1994, Brennan filed an
affidavit in opposition to the motion to dismiss which had been filed early in
the action. Brennan had an additional
opportunity to submit materials in opposition to the motion to dismiss during
the ten-day period between the filing of the motion and the hearing.[4]
We
next address Brennan's argument that summary judgment was improper because a
dispute of fact exists as to whether the $2900 check he submitted was a
certified check. He relies on the
recitation in his affidavit that the check was certified as disputing the
recitation in Kay's affidavit that the check was not certified. However, whether the check satisfied the
definition of a certified check was a question of law.[5] The trial court needed only to examine the
check to determine that it did not contain the appropriate endorsement as a
certified check. That the check was not
certified was not a disputed issue of fact.
What
is curiously missing is any explanation for the parties' apparent belief that
if the check had been a certified check, the garnishment action may have been
an abuse of process. The $2900 check
tendered by Brennan on March 16, 1994, was a cashier's check; it was a check
drawn on the financial institution's own account. See Black's Law
Dictionary, 217 (6th ed. 1990).
Kay acknowledged the check in a letter dated March 18, 1994, and made no
objection to the fact that the check was not certified. We recognize that as a practical matter a
cashier's check, like a certified check, can be considered to be backed by
sufficient funds to guarantee payment.
However, here the check was only a partial payment of the judgment and
could not constitute a complete defense to the garnishment proceeding.
Brennan
contends that the trial court's determination that Kay had acted in good faith
and that no abuse of process or fraud existed was a disputed issue of
fact. Abuse of process is found where
one uses a legal process against another primarily to accomplish a purpose for
which it is not designed. Brownsell
v. Klawitter, 102 Wis.2d 108, 114, 306 N.W.2d 41, 44 (1981). Abuse of process has two essential elements:
"‘a wilful act in the use of process not proper in the regular conduct of
the proceedings’ and an ‘ulterior motive.’" Id. at 115, 306 N.W.2d at 45 (quoted source
omitted). The first element requires
allegation of "[s]ome definite act or threat not authorized by the
process, or aimed at an objective not legitimate in the use of the process ...;
and there is no liability where the defendant has done nothing more than carry
out the process to its authorized conclusion, even though with bad
intentions." Tower Special
Facilities v. Investment Club, 104 Wis.2d 221, 229, 311 N.W.2d 225, 229
(Ct. App. 1981) (quoting Thompson v. Beecham, 72 Wis.2d 356, 362,
241 N.W.2d 163, 166 (1976)).
Brennan's
complaint alleged that despite the fact that he had already paid $2900 to Brown
& Jones on the judgment, the garnishment action was commenced for the full
amount of the judgment. He also alleged
that Kay entered judgment in excess of the debt still due. Kay's affidavit stated that the garnishment
action was commenced for the entire amount of the judgment because it was not
known on March 23, 1994, the date the action was commenced, whether the check
had cleared deposit into the Brown & Jones bank account.[6] He stated that he acted to protect his
client's interest because Brennan had stated that he would not honor the full
amount of the judgment. Kay's letter
acknowledging receipt of the check gave Brennan the opportunity to pay the
remaining portion of the judgment, and if he did so, Kay indicated that he
would not docket the judgment. When
Brennan failed to tender the remaining portion, Kay proceeded with the
garnishment proceeding. On March 28,
1994, Kay inquired of Brown & Jones whether the check had cleared. Upon learning that the check had cleared,
Kay wrote to Brennan suggesting a resolution.
An amended garnishment complaint was filed on March 31, 1994, giving
credit for the payment on the judgment.
Undoubtedly
commencement of the garnishment action was a display of legal
"hardball." That posture has
plagued the entire interaction of Attorneys Brennan and Kay over the debt in
dispute.[7] However, Kay did not use the garnishment
process for any purpose for which it was not intended, that is, to extract payment
of a judgment. Double payment on the
judgment was never attained. That Kay
may have felt obliged to abandon professional courtesy and trust and proceed
without providing an adequate time for the check to clear does not constitute
abuse of process. See Stern v.
Thompson & Coates, Ltd., 185 Wis.2d 220, 252, 517 N.W.2d 658, 670
(1994) (we need not consider an alleged ulterior motive until or unless some
perversion or unjust manipulation of the process is shown).
Further,
Brennan did not suffer damages as a result of the garnishment. It is undisputed that the bank's holding of
the entire amount of the judgment did not cause Brennan's account to
become overdrawn and that the money was withheld for only fourteen days.
Brennan complains that he was not allowed to present evidence on his allegation
that the garnishment proceeding affected his relationship with his bank. Although he does not suggest what evidence
he has, we have already determined that he had an opportunity to submit
pertinent materials, such as an affidavit from a bank officer.
Having
determined that it was not error to grant summary judgment dismissing Brennan's
action, we reject Brennan's claim that he was not permitted discovery before
being required to respond to the motion to dismiss. Brennan does not explain what additional material he could have
obtained through discovery. The trial
court's decision was based on the pleadings and affidavits. Under the circumstances, discovery was not
necessary.
We
turn to Brennan's contention that the trial court's determination that the
action was frivolous under § 814.025, Stats.,
was "grievously unfair" and improper because the complaint stated a
cause of action. The trial court
determined that the action was frivolous upon both grounds stated in §
814.025(3): (a) that the action was
commenced in bad faith, solely for purposes of harassing another, and (b) that
the party knew or should have known that the action was without a reasonable
basis in law. We need only consider the
ruling under § 814.025(3)(b).
If
the record is sufficient, we can decide as a matter of law whether a reasonable
attorney should have known the action was without a proper basis in law. Elfelt v. Cooper, 163 Wis.2d
484, 501, 471 N.W.2d 303, 310 (Ct. App. 1991), rev'd on other grounds,
168 Wis.2d 1008 (1992), cert. denied, 113 S. Ct. 1251 (1993). The standard is an objective one: whether the attorney knew or should have
known that the position taken was frivolous as determined by what a reasonable
attorney would have known or should have known under the same or similar
circumstances. Stern, 185
Wis.2d at 241, 517 N.W.2d at 666.
Brennan
knew that a valid judgment had been entered against him, that a judgment
creditor has the right to commence a garnishment proceeding to collect the
judgment, that he had not tendered the full amount of the judgment, and that
because a court determination would be made as to the amount that would be paid
over to the judgment creditor, no double recovery was possible. In possession of that knowledge, a
reasonable attorney would know that an action for abuse of process would not
lie. "[A] claim cannot be made
reasonably or in good faith, even though possible in law, if there is no set of
facts which could satisfy the elements of the claim, or if the party or
attorney knows or should know that the needed facts do not exist or cannot be
developed." Id. at
244, 517 N.W.2d at 667. Therefore, as a
matter of law, the action was frivolous.
The
final issue is the assessment of costs on appeal. We must make a determination of whether an appeal is frivolous
under Rule 809.25(3)(c), Stats.
We may make this determination as a matter of law. Stern, 185 Wis.2d at 252, 517
N.W.2d at 670. It follows that upon
affirming the trial court's determination that the action was frivolous, the
appeal is frivolous as a matter of law.
See id. at 253, 517 N.W.2d at 671. See also Riley v. Isaacson,
156 Wis.2d 249, 262, 456 N.W.2d 619, 624 (Ct. App. 1990) (if the claim is
correctly adjudged to be frivolous in the trial court under § 802.05, Stats., it is frivolous per se on
appeal). Brennan should have known that
his claim that dismissal was improper was without any reasonable basis in law
or equity. He should have also known
that, as a sole defense to a finding of frivolousness, his argument that the
action was not frivolous because the complaint stated a cause of action lacks
any reasonable basis in law.
We
therefore remand to the trial court to determine and assess the costs and
reasonable attorney's fees incurred in this appeal against Brennan.
By
the Court.—Order affirmed but
cause remanded with directions.
This
opinion will not be published. See
Rule 809.23(1)(b)5, Stats.
[1] This is
substantiated by the fact that at least the first sixteen pages of the parties'
briefs are devoted to the statement of the facts, including the recitation of
extraneous information in an effort to aggrandize their legal positions in
related actions.
[2] Section
802.06(3), Stats., provides:
After issue is joined between all parties but within time
so as not to delay the trial, any party may move for judgment on the
pleadings. Prior to a hearing on the
motion, any party who was prohibited under s. 802.02(1m) from specifying
the amount of money sought in the demand for judgment shall specify that amount
to the court and to the other parties.
If, on a motion for judgment on the pleadings, matters outside the pleadings
are presented to and not excluded by the court, the motion shall be treated as
one for summary judgment and disposed of as provided in s. 802.08, and all
parties shall be given reasonable opportunity to present all material made
pertinent to the motion by s. 802.08.
Even if the motion to dismiss
was brought under § 802.06(2)(b), Stats.,
as Kay argues, the motion can be converted to summary judgment and all parties
shall be given a reasonable opportunity to present relevant materials.
[3] Our conclusion
rejects Brennan's claim that the trial court should not have considered the two
affidavits filed in support of the motions to dismiss.
[4] Brennan argues
that when one considers the motion to dismiss as one for summary judgment, he
was not given the twenty-day notice required by § 802.08, Stats. Brennan did not object in the trial court to the timeliness of
the motion and has waived the objection.
See Allen v. Allen, 78 Wis.2d 263, 270, 254 N.W.2d
244, 248 (1977) (the burden is upon the party alleging error to establish by
reference to the record that the error was specifically called to the attention
of the trial court). He raises the
issue for the first time on appeal and we will not address it. Segall v. Hurwitz, 114 Wis.2d
471, 489, 339 N.W.2d 333, 342 (Ct. App. 1983).
At the conclusion of his
brief, Brennan claims that in denying him the opportunity to present pertinent
materials, the trial court deprived him of his constitutional rights of due
process of law and equal protection of the laws. The argument is a single paragraph and contains no citation to
legal authorities. We need not consider
arguments broadly stated but not specifically argued. Fritz v. McGrath, 146 Wis.2d 681, 686, 431 N.W.2d
751, 753 (Ct. App. 1988).
[5] A certified
check is defined as "the check of a depositor drawn on a bank on the face
of which the bank has written or stamped the words `accepted' or `certified'
with the date and signature of a bank official." Black's Law Dictionary,
227 (6th ed. 1990). A certified check
becomes the primary obligation of the certifying bank. See §§ 403.411 and 403.413, Stats.
It is a warranty that sufficient funds are on deposit and have been set
aside.