Pro
The Bench Bar Committee proposal removes guesswork as to what claims
are mandatory counterclaims and provides finality and equity by ensuring
certain claims are litigated when they should be.
By Donald Leo Bach
Suppose you have a client who has just been sued in circuit court. The
client advises you that she has a claim against the suing party. As a good
lawyer you do what you were taught in law school, go to the statute book,
find the one on counterclaims - section 802.07 - and read it. The
statute tells you that a defendant "may counterclaim any claim
which the defendant has against a plaintiff." You conclude that in
Wisconsin counterclaims are permissive, and you advise the client that she
does not have to bring a counterclaim in this lawsuit if she does not wish
to do so.
But wait. Have you read A.B.C.G. Enterprises Inc. v. First Bank Southeast
N.A., 184 Wis. 2d 465, 515 N.W.2d 904 (1994)? In that case, the Wisconsin
Supreme Court held that the principles of res judicata (claim preclusion)
preclude a defendant who could but did not counterclaim in a prior action
from bringing a later action on the claim if it "would nullify the
initial judgment" or "impair rights established in the initial
action."
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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
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.
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