Dec. 5, 2017 – The Wisconsin Supreme Court recently upheld an actual damages award, attorney fees, and double costs in favor of an estate that filed a small claims action against the decedent’s niece for civil theft of funds from the estate.
A circuit court awarded Stanley Miller’s estate $10,000 in actual damages as well as $20,000 in exemplary damages, $20,000 in attorney fees, and double taxable costs.
However, an appeals court reversed, concluding that civil theft claims against Miller’s niece, Diane Storey, are actions “based in tort” and subject to a $5,000 cap that applies to tort actions filed in small claims court under section 799.01(1)(cr).
The appeals court also ruled that a provision for double costs did not apply, an exemplary damage award must be decided by a jury, not by the circuit court upon post-verdict motion, and allowable “costs of litigation” did not include attorney fees.
In Estate of Miller v. Storey, 2017 WI 99 (Nov. 30, 2017), a majority ruled that civil theft actions, under Wis. Stat. section 895.446, are not actions based in tort – the estate could obtain a $10,000 actual damage award and double costs were authorized.
The majority also ruled that the estate could obtain attorney fees as “costs of investigation and litigation.” However, a majority ruled that the appeals court did not commit an error in reversing the circuit court’s award of $20,000 in exemplary damages.
In small claims court, tort claims are capped at $5,000, but “other civil actions” are capped at $10,000. Storey argued that the civil theft claim is a tort claim and thus the estate could not obtain more than $5,000 in actual damages in small claims court.
The majority did not interpret the statues in favor of Storey’s view. The majority said the civil theft claim is an “other civil action” based on fundamental principles of statutory construction and the “legislature’s choice to provide a statutory civil theft claim.”
“Thus, the $10,000 in damages claimed and subsequently awarded is appropriate under Wis. Stat. § 799.01(1)(d)’s damages cap,” wrote Justice Annette Ziegler, noting double taxable costs were allowed since Storey declined an offer to settle at a lesser amount.
Section 895.446(3)(b) allows a prevailing plaintiff to recover, among other things, “all costs of investigation and litigation that were reasonably incurred.” Storey argued that investigation and litigation costs don’t include attorney fees, but the majority disagreed.
The majority noted that a previous appeals court decision interpreted the phrase to include attorney fees, and the legislature did nothing to change that ruling. The legislature actually made six revisions to that statute after the court decision.
The legislature acquiesced to the court’s interpretation. “This doctrine of legislative acquiescence applies with equal, if not greater, force where the legislature has acted on the statute but declines to revise the interpreted language,” Justice Ziegler wrote.
The majority also noted section 799.25 says clerks must insert “costs” into judgments for prevailing parties, including attorney fees, and “the private attorney general doctrine supports the conclusion that attorney fees are included as costs of litigation.”
Storey argued the estate did not raise the issue of exemplary damages until a post-verdict motion, and juries must decide exemplary damages. The appeals court accepted Storey’s argument and reversed the circuit court’s exemplary damages award.
The majority agreed that the estate was not entitled to $20,000 in exemplary damages because the circuit court’s ruling was contrary to a clear legal standard that says juries must decide punitive damages after the judge determines consideration is appropriate.
“[A]lthough the judge initially determines whether exemplary damages are an appropriate issue to be presented to the trier of fact, it is within the discretion of the trier of fact to determine whether to actually award exemplary damages and, if so, in what amount,” Justice Ziegler wrote.
Justice Daniel Kelly, joined by Justice Rebecca Bradley, dissented with respect to the majority’s conclusion on attorney fees. Kelly said the majority relied on a decision that did not answer the question, and the legislature’s subsequent inaction did not answer it.
“We found the meaning of Wis. Stat. § 895.446(3)(b) in a court of appeals opinion that did not address the question we answered, a collection of inapposite interpretive canons, some policy arguments, and a canard,” Justice Kelly wrote.
“And the methodology we employed led us to the wrong conclusion. Consequently, I respectfully dissent from that portion of our opinion,” Kelly explained.
Justice Shirley Abrahamson dissented, concluding that civil theft is an action based in tort and thus a $5,000 actual damages cap applied and the estate was not entitled to double costs. She also largely agreed with Kelly’s analysis on attorney fees.
“By relying on unremarkable truisms and red herrings in the guise of reasoned analysis, the majority concludes that a civil theft claim … is not an ‘action based in tort,’” Justice Abrahamson wrote. “Thus, the majority contravenes almost 30 years of case law compelling a different conclusion.”