PUBLISHED OPINION
Case No.: 95-1405
Complete
Title
of
Case:MICHAEL W. BOOTH
AND WENDY L. BOOTH,
Plaintiffs-Respondents,
v.
AMERICAN STATES INSURANCE COMPANY,
A FOREIGN CORPORATION,
Defendant-Appellant.
Submitted
on Briefs: December 12, 1995
COURT COURT OF
APPEALS OF WISCONSIN
Opinion
Released: January 25, 1996
Opinion
Filed: January
25, 1996
Source
of APPEAL Appeal from a judgment
Full
Name JUDGE COURT: Circuit
Lower
Court. COUNTY: Green
(If
"Special" JUDGE: William
D. Johnston
so
indicate)
JUDGES: Gartzke,
P.J., Dykman and Vergeront, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSFor the defendant-appellant the
cause was submitted on the briefs of Larry W. Barton of Nowlan &
Mouat of Janesville.
Respondent
ATTORNEYSFor the plaintiffs-respondents the
cause was submitted on the brief of Eugene R. Pigatti of Milwaukee.
Amicus Curiae brief was filed by Todd W. Schluesche of Ewald
Law Offices, S.C. of Monroe.
COURT OF
APPEALS DECISION DATED AND
RELEASED January
25, 1996 |
NOTICE |
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. 95-1405
STATE OF WISCONSIN IN
COURT OF APPEALS
MICHAEL
W. BOOTH
AND
WENDY L. BOOTH,
Plaintiffs-Respondents,
v.
AMERICAN
STATES INSURANCE COMPANY,
A
FOREIGN CORPORATION,
Defendant-Appellant.
APPEAL
from a judgment of the circuit court for Green County: WILLIAM D. JOHNSTON, Judge. Affirmed.
Before
Gartzke, P.J., Dykman and Vergeront, JJ.
VERGERONT,
J. American States Insurance Company
(American States) appeals from a judgment denying its motion for costs and
attorney fees under §§ 814.025 and 802.05, Stats. The trial
court denied the motion on the ground that it was not filed prior to the entry
of judgment as required under our decision in Northwest Wholesale Lumber,
Inc. v. Anderson, 191 Wis.2d 278, 528 N.W.2d 502 (Ct. App. 1995). The issue on appeal is whether the trial
court's decision and order granting American States' motion for summary
judgment and dismissing the action filed by Michael and Wendy Booth is a
judgment for purposes of §§ 814.025 and 802.05. We conclude the document is a judgment, and affirm.
BACKGROUND
The
following facts are not disputed. The
Booths filed their complaint against American States on February 11, 1993,
alleging bad faith in processing a claim under a health insurance policy issued
by American States. On March 28, 1994,
American States filed a motion for summary judgment. The trial court granted American States' motion in a document
titled "Decision on Defendant's Motion for Summary Judgment and
Order." This was filed in the
office of the clerk of court on June 17, 1994.
On
July 28, 1994, American States filed a motion requesting costs and attorney
fees under § 814.025, Stats.,[1]
the "frivolous action" statute, and § 802.05(1)(a), Stats.,[2]
which requires attorneys and parties signing pleadings or other documents in an
action to first determine that the documents are well grounded in fact and law.
Following
an evidentiary hearing, the parties advised the trial court of our decision in Northwest
Wholesale Lumber, Inc. v. Anderson, 191 Wis.2d 278, 528 N.W.2d 502 (Ct.
App. 1995). In Northwest
Wholesale Lumber, we held that the language of § 814.025(1), Stats., providing that costs shall be
awarded if the trial court makes a finding of frivolousness "during the
proceedings or upon judgment," requires that a frivolous-action motion be
filed before the trial court enters judgment in the case. Id. at 281, 528 N.W.2d at
504. We also held that, while
§ 802.05, Stats., is silent
on the time within which motions must be filed under its terms, the statute
embodies the same requirement--that the motion be filed prior to the entry of
judgment. Id. at 281-82,
528 N.W.2d at 504. A judgment is
entered when it is filed in the office of the clerk of court. Section 806.06(1)(b), Stats.
The
trial court determined that, while the document granting American States'
motion for summary judgment was titled a decision and order, it was the final
determination of the action and, therefore, a judgment. Citing Northwest Wholesale Lumber,
the court then dismissed American States' motion for costs and attorney fees
because the motion had not been filed prior to the entry of judgment on June
17, 1994.
The
application of a statute to an undisputed set of facts presents an issue of
law, which we review de novo. Tahtinen
v. MSI Ins. Co., 122 Wis.2d 158, 166, 361 N.W.2d 673, 677 (1985).
DISCUSSION
American States contends
that its motion was not untimely because, while Northwest Wholesale
Lumber holds that motions brought under §§ 814.025 and 802.05, Stats., must be filed prior to the
entry of judgment, the trial court did not enter a judgment on its motion for
summary judgment, but rather an order.
According to American States, the term "judgment" contemplates
a document titled a judgment. We
disagree.
The
trial court document is labeled a "Decision on Defendant's Motion for
Summary Judgment and Order."
However, whether a written direction of a trial court constitutes a
judgment is not determined by the designation the trial court uses. State v. Donohue, 11 Wis.2d
517, 520, 105 N.W.2d 844, 846 (1960). Rather,
the test is the statutory definition set forth in § 806.01(1)(a), Stats.
See id. (applying § 270.53, Stats., the predecessor to §
806.01(1)(a)).
"A
judgment is the determination of the action." Section 806.01(1)(a), Stats.[3] The trial court document grants summary
judgment to American States, dismisses the Booths' action and awards American
States $50 in costs under § 814.07, Stats.[4] This is a determination of the action and,
therefore, a judgment. See, e.g.,
Fredrick v. City of Janesville, 92 Wis.2d 685, 687, 285 N.W.2d
655, 656 (1979) (order granting defendants' motion to dismiss on the merits is
a judgment because it determines the action); Collins v. Gee, 82
Wis.2d 376, 381, 263 N.W.2d 158, 161 (1978) (order directing new trial on
damages was not a judgment for purposes of §§ 895.04 and 270.53, Stats., 1973, because it did not
finally determine the rights of the parties to the action); Committee to
Retain Byers v. Elections Bd., 95 Wis.2d 632, 633 n.1, 291 N.W.2d 616,
617 (Ct. App. 1980).
American
States incorrectly relies on Kling v. Sommers, 252 Wis. 217, 31
N.W.2d 206 (1948), for the proposition that the determination of a motion is an
order, not a judgment. In Kling,
the trial court denied a motion to vacate the confirmation of a foreclosure
sale and to grant the defendant an enlarged time for redeeming his mortgaged
premises from the foreclosure judgment.
Our supreme court held that this determination was an order, not a
judgment, because it was entered in a special proceeding instituted by a
motion. The court stated that "all
determinations entered in special proceedings are orders and not judgments by
statutory definition." Id.
at 220, 31 N.W.2d at 208.
In
Donohue, the court explained that Kling did not
hold that the determination of a motion is an order:
[I]t is contended that Kling v. Sommers, supra,
lays down the rule that any court determination entered pursuant to a motion is
an order and not a judgment. We do not
consider that this was what was held in the Kling case. In that case the motion was one to set aside
an order confirming sale in a mortgage-foreclosure action and the court
determined that the instrument which denied the motion was an order and not a
judgment. The rationale of such holding
was that the matter determined was a special proceeding initiated by motion and
not by summons or an original writ.
Donohue, 11 Wis.2d at 522, 105 N.W.2d at 847.
Unlike
in Kling, the summary judgment motion brought by American States
was not a special proceeding initiated by motion. Moreover, at the time Kling and Donohue
were decided, judgments and orders were separately defined by statute and
different appeal time limits applied depending on whether the document appealed
from was a judgment or an order.[5] The distinctions between judgment and order
for purposes of appeal are now largely nonexistent. Under § 808.03(1), Stats.,
an appeal as a matter of right can be taken from a final judgment or final
order which disposes of the entire matter in litigation as to one or more of
the parties, whether rendered in an action or special proceeding. Whether entered in an action or special
proceeding, and whether labeled an order or judgment, the appealability of a
document depends on whether it is final.
See Fredrick, 92 Wis.2d at 688, 285 N.W.2d at 657.
American
States next argues that the trial court document is not a "judgment"
within the meaning of §§ 814.025 and 802.05, Stats.,
because it does not include the statutory costs to which it is entitled. We disagree.
A
judgment is perfected by the taxation of costs and the insertion of the amount
thereof in the judgment. Section 806.06(1)(c),
Stats. Under § 806.06(4), a judgment may be rendered and entered at
the instance of any party either before or after perfection. If the party in whose favor the judgment is
rendered causes it to be entered, the party has thirty days from entry within
which to tax costs. Id.
In
Northwest Wholesale Lumber, we held that a motion for costs and
attorney fees under §§ 814.025 and 802.05, Stats.,
must be filed prior to the entry of judgment, whether or not costs have yet
been taxed at the time of entry. Northwest
Wholesale Lumber, 191 Wis.2d at 282, 528 N.W.2d at 504. We stated:
[Appellant] has not persuaded us that because general
costs of the action allowable under § 814.04, Stats., ... are taxed after judgment, we must construe the
"upon judgment" language of § 814.025(1), Stats., as reaching beyond the entry of
judgment....[W]e do not believe the language chosen by the legislature permits
such an interpretation.
Id. at 283 n.2, 528 N.W.2d at 504.
See also Fredrick v. City of Janesville, 91 Wis.2d
572, 576, 283 N.W.2d 480, 482 (Ct. App. 1979) (a judgment is final for appeal
purposes whether or not costs have been taxed), rev'd on other grounds,
92 Wis.2d 685, 285 N.W.2d 655 (1979).
Thus,
even if the judgment in this case did not include all of the taxable costs to
which American States was entitled, American States was still required to file
its motion for costs and attorney fees prior to the entry of the judgment.
American
States notes that in Northwest Wholesale Lumber, a memorandum
decision in the plaintiff's favor was filed over two months prior to the entry
of judgment and the memorandum decision was not considered the judgment for
purposes of determining the timeliness of the motion brought under
§§ 814.025 and 802.05, Stats. American States appears to argue that, like
the memorandum decision in Northwest Wholesale Lumber, the trial
court document in this case is not a judgment.
The
flaw in this argument is that there was no dispute in Northwest Wholesale
Lumber regarding which document was the judgment for purposes of
determining the timeliness of a motion under §§ 814.025 and 802.05, Stats.
Rather, the dispute centered on whether "upon judgment" meant
at or upon the time judgment is entered, or some later point. Since neither party suggested that the
memorandum decision constituted the judgment, we did not discuss that issue.
Finally,
American States argues that it is "often impossible" to decide
whether or not to file a motion for costs and attorney fees until a motion for
summary judgment has been decided, and that if we construe an order granting
summary judgment as a judgment, parties will have no window of opportunity
within which to file sanctions motions.
According to American States, "counsel will be required to
prematurely (and perhaps even routinely) include such motions in the initial
pleadings even though there may be no then-existing basis to do so."
This
argument is not persuasive. First, Northwest
Wholesale Lumber holds only that a motion for costs and attorney fees under
§§ 814.025 and 802.05, Stats.,
must be filed prior to the entry of judgment.
It does not require that the motion be filed with the initial
pleadings. A party may timely file a
motion for costs and attorney fees after reading the opponent's pleadings,
briefs, affidavits and other documents as long as the sanctions motion is filed
prior to the entry of the judgment.
Second,
with respect to § 802.05, Stats.,
we made clear in Northwest Wholesale Lumber that prompt action in
seeking sanctions on documents alleged to violate the statute is
necessary. In discussing Fed. R. Civ. P. 11, after which
§ 802.05 was patterned, we cited with favor the following passage from a
federal case:
If a party's action is "abusive" as
contemplated by Rule 11, the adversary should be able to realize immediately
that an offense has occurred. Seldom
should it be necessary to wait for the district court or the court of appeals
to rule on the merits of an underlying question of law. If there is doubt how the district court
will rule on the challenged pleading or motion, the filing of the paper is
unlikely to have violated Rule 11.
Northwest Wholesale Lumber, 191 Wis.2d at 290, 528 N.W.2d at 507 (emphasis added)
(citing Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 99 (3d
Cir. 1988)).
Third,
with respect to § 814.025, Stats.,
an award of costs and fees under this statute does not depend upon the result
of the litigation.[6] The purpose of the statute is to deter
litigants and attorneys from commencing or continuing frivolous actions and to
punish those who do so. Stoll v.
Adriansen, 122 Wis.2d 503, 511, 362 N.W.2d 182, 187 (Ct. App.
1984). Frivolousness is not determined
by whether a party's position carries the day, but whether there is no reasonable
basis for a claim or defense. In
re Estate of Bilsie, 100 Wis.2d 342, 350, 302 N.W.2d 508, 514 (Ct. App.
1981); cf. Northwest Wholesale Lumber, 191 Wis.2d at 298,
528 N.W.2d at 510 (Sundby, J., dissenting).[7] The action to which American States objected
was filed by the Booths on February 11, 1993.
American States moved for summary judgment on March 28, 1994. It has not offered any explanation for why
it had to wait until the trial court's decision on its motion for summary
judgment to file a motion for costs and attorney fees.
By the Court.—Judgment affirmed.
[1] Section 814.025(1), Stats., provides in relevant part:
If an action ...
commenced or continued by a plaintiff or a counterclaim, defense or cross
complaint commenced, used or continued by a defendant is found, at any time
during the proceedings or upon judgment, to be frivolous by the court, the
court shall award to the successful party costs determined under s. 814.04 and
reasonable attorney fees.
[2] Section 802.05(1)(a), Stats., provides in relevant part:
The signature of an attorney or party constitutes a
certificate that the attorney or party has read the pleading, motion or other
paper; that to the best of the attorney's or party's knowledge, information and
belief, formed after reasonable inquiry, the pleading, motion or other paper is
well-grounded in fact and is warranted by existing law or a good faith argument
for the extension, modification or reversal of existing law; and that the
pleading, motion or other paper is not used for any improper purpose, such as
to harass or to cause unnecessary delay or needless increase in the cost of
litigation.... If the court determines that an attorney or party failed to read
or make the determinations required under this subsection before signing any
petition, motion or other paper, the court may, upon motion or upon its own
initiative, impose an appropriate sanction on the person who signed the
pleading, motion or other paper, or on a represented party, or on both. The sanction may include an order to pay to
the other party the amount of reasonable expenses incurred by that party
because of the filing of the pleading, motion or other paper, including
reasonable attorney fees.
[3] Section 806.01(1), Stats., provides in relevant part:
(a) A judgment is the determination of the
action. It may be final or
interlocutory.
(b) Each judgment
shall specify the relief granted or other determination of the action, and the
name and place of residence of each party to the action.
(c) Every final
judgment shall grant the relief to which the party in whose favor it is
rendered is entitled, even if the party has not demanded the relief in the
pleadings....
[4] Section 814.07, Stats., provides:
"Costs may be allowed on a motion, in the discretion of the court
or judge, not exceeding $50, and may be absolute or directed to abide the event
of the action."
[5] At the time State v. Donohue,
11 Wis.2d 517, 105 N.W.2d 844 (1960) was decided, a "judgment" was
defined as "the final determination of the rights of the parties in the action,"
and an "order" was defined as "[e]very direction of a court or
judge made or entered in writing and not included in a judgment." Section 270.53, Stats., 1959. To be
appealable, an order had to be a final order affecting a substantial right made
in a special proceeding or a final order affecting a substantial right which in
effect determined the action and prevented a judgment from which an appeal
could be taken. Section 274.33(1) and
(2), Stats., 1959. The time limits for appeals from orders and
judgments were also different. See
§§ 274.04 and 274.01, Stats.,
1959. Under current rules of civil
procedure, "judgment" is defined as "the determination of the
action." Section 806.01(1)(a), Stats.
It may be final or interlocutory.
Id. An
"order" is no longer separately defined.
[6] This is in contrast to a request for attorney
fees under § 100.18, Stats.,
which is verdict-related, see Gorton v. American Cyanamid Co.,
194 Wis.2d 203, 230, 533 N.W.2d 746, 757 (1995), cert. denied, ___ U.S.
___, 116 S. Ct. 753 (1996), and a request for attorney fees for representation
in a ch. 227 review of a family-medical leave matter, which is outcome-related,
see Richland Sch. Dist. v. DILHR, 166 Wis.2d 262, 285-86,
479 N.W.2d 579, 589 (Ct. App. 1991), aff'd, 174 Wis.2d 878, 498 N.W.2d
826 (1993).
[7] As we made clear in Northwest Wholesale
Lumber, Inc. v. Anderson, 191 Wis.2d 278, 528 N.W.2d 502 (Ct. App.
1995), while motions brought under §§ 814.025 and 802.05, Stats., must be filed prior to the
entry of judgment, courts may, in their discretion, rule on the motion after
judgment is entered. Id.
at 286 n.5, 528 N.W.2d at 505.