Bench Bar Committee Mandatory Counterclaim Proposal

Should Wisconsin Change its Counterclaim Statute?

Con: The Bench Bar Committee proposal encourages too many claims, doesn't allow enough time for meaningful investigation, and has far-reaching ethical implications.

By Merrick R. Domnitz & Michael L. Eckert

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The public perceives that lawyers file too many "frivolous claims" in civil courts throughout the country, including Wisconsin. The passage of the mandatory counterclaim statute may well be a step towards making this perception a reality for parties in civil litigation.

Section 802.05(1)(a) of the Wisconsin Statutes requires that all claims, including counterclaims, be well-grounded in fact and warranted by existing law. There is no statute that currently mandates the filing of a counterclaim in a party's responsive pleading. Consequently, there is no time limit, other than the statute of limitations, on a party's ability to conduct an investigation of the facts and law underlying a potential counterclaim. Because existing procedural rules are structured to encourage full investigation, they discourage the pursuit of frivolous counterclaims. Adoption of the proposed mandatory counterclaim statute will likely achieve the opposite result.

Upon service of the Complaint, counsel for the defendant will have 45 days to determine not only the existence of each and every potential counterclaim, but the factual and legal basis for each and every potential counterclaim. The duty to investigate would be triggered by the filing of a claim against a defendant who may not even have anticipated being party to the civil proceeding, let alone a defendant who anticipated a need to conduct any meaningful investigation of the facts and circumstances surrounding the claim. Forty-five days does not, typically, allow counsel enough time to make a reasoned and intelligent decision regarding the facts or law underlying a claim. Counsel may have no choice but to file a "shotgun" pleading, asserting every conceivable counterclaim.

The Rules of Civil Procedure should be fashioned to encourage, not discourage, a full and complete analysis of the facts and law underlying all claims brought before the civil bench. The passage of the proposed mandatory counterclaim statute will not encourage such investigation. To the contrary, it will encourage "shotgun" pleading in civil courts throughout the state.

From defense counsel's perspective, mandatory counterclaims also may have far-reaching ethical implications. Often times defense counsel are confronted with a client who not only requires a defense to a potential claim, but has suffered personal injuries in the accident that forms the basis of the plaintiff's cause of action. It is an obvious conflict of interest for defense counsel to represent the interest of the client in defense of the plaintiff's claim, and to represent the client with respect to personal injuries sustained in the accident. A mandatory counterclaim statute may leave defense counsel confronting that situation; that is, a client with a viable personal injury claim with little alternative but to undertake conflicting representation. This potential becomes even more apparent in the event of an approaching statute of limitations, or in the case of a client who is unwilling to act on his or her own behalf in retaining counsel with respect to the client's right of recovery for personal injuries sustained in the accident.

Merrick R. Domnitz, Hamline 1977, chairs the State Bar Litigation Section Board of Directors, is a member of the Association of Trial Lawyers of America Board of Directors, and is a member and past president of the Wisconsin Chapter of the American Board of Trial Advocates. He is the senior shareholder in the Milwaukee and Kenosha law firm of Domnitz, Mawicke, Goisman & Rosenberg S.C.

Michael L. Eckert, U.W. 1975, is a civil trial practitioner emphasizing defense law, in Rhinelander. He is a past president of Civil Trial Counsel of Wisconsin, and a member of the Defense Research Institute, The Federation of Insurance and Corporate Counsel, and the International Association of Defense Counsel.

Wisconsin Lawyer