Wisconsin Court Interprets Wisconsin Statute Chapter 814 Governing Costs In Civil Actions

In a lawsuit setting forth a common factual scenario found in many civil cases, the court had an opportunity and did decide with specificity the applicable provisions in Chapter 814 of the Wisconsin Statutes.

In the case of Weber v. Auto-Owners Insurance Company (“Auto-Owners”), Appeal No. 2014AP1953, the Appellate Court dealt with a situation wherein the plaintiff and her husband initiated a lawsuit against Auto-Owners alleging damages for the wife’s injuries and also asserting the loss of society and companionship on behalf of her spouse who was also named as a plaintiff. Sometime after the lawsuit was initiated, the plaintiffs filed a statutory offer of settlement in the amount of $100,000 for both the negligence and loss of society and companionship claims. Auto-Owners rejected the offer with the case subsequently being tried and with the jury awarding the wife $2,900 in past damages on her negligence claim, but declining to award her husband damages for loss of society and companionship.

Following trial, the wife plaintiff asserted she was entitled to statutory costs with Auto-Owners also asserting it was entitled to statutory costs on the denial of her husband’s claim, with both parties submitting a bill of costs.

The Court began its analysis by stating that pursuant to Wis. Stat. § 814.01(1) “except as otherwise provided in this chapter, costs shall be allowed of course to the plaintiff upon recovery.” Alternatively, the Court stated: “If the plaintiff is not entitled to costs under § 814.01(1) … the defendant shall be allowed costs to be computed on the basis of the demands of the complaint.” Section 814.04(1) allows recovery of limited attorney fees, with § 814.04(2) permitting recovery of disbursements which are set forth in the applicable statutory section.

The Court continued by stating that an award of costs to a successful plaintiff under Wis. Stat. § 814.01 or a successful defendant under Wis. Stat. § 814.03 is mandatory, not discretionary. Specifically, a court has discretion to determine whether a particular disbursement was “necessary,” as required by § 814.04(2).

In dealing with the wife’s negligence claim, the Court stated that “when a litigant prevails on one claim, but not another, it may recover statutory disbursements on the successful claim, but it must first demonstrate which of its claimed expenses were related to the successful claim.” As such, to recover statutory disbursements, a successful party “must show a necessary expenditure relating to the losing party’s case.” Contrary to the plaintiff’s position, Auto-Owners argued that a court can properly consider the “proportionality” of the recovery on the negligence claim versus the amount of claimed expenses when awarding statutory disbursements. However, the Court stated that the plain language of the relevant statutes supports a conclusion that a court cannot consider proportionality when awarding statutory disbursements. The Court stated that none of these statutes suggests that a court may reduce the disbursements awarded to a successful litigant based upon the fact that the litigant’s recovery was disproportionate to its claimed expenses.

The Court went on to state that, in general, an expense is necessary when it is required either for a party to prepare its case or for the court to decide the case. The Court indicated that an expense is not necessary when it is incurred merely for the convenience of a party.

In the course of the parties’ dispute over statutory costs and disbursements, the Court indicated that a litigant need only show that any claimed expenses were related to the successful claim, not that the claimed expenses were “solely” related to its successful claim or defense.

In dealing with the husband’s claim for loss of society and companionship, Auto-Owners argued that it was entitled to all of its claimed expenses because any expenses incurred to defend the wife’s negligence claim were also necessarily related to the loss of society and companionship claim. Auto-Owners argued it defeated the husband’s loss of society and companionship claim by limiting his wife’s recovery on the negligence claim. In essence, Auto Owners asserted its expenses could not be separated by claim. However, the Court rejected such an argument stating that there must be a connection between Auto-Owners’ successful defense of the husband’s claim, specifically, and not claim that their defense of the husband’s claim was incurred in the defense of his wife’s claim.

Finally, the Court stated that Wis. Stat. § 814.04(1) mandates that a prevailing party or defendant is entitled to statutory attorney fees as an item of costs, regardless of whether he or she is also entitled to statutory disbursements under § 814.04(2). In the subject case, the Court indicated that it was undisputed that the wife was successful on her negligence claim and that Auto-Owners prevailed in defense of her husband’s loss of society and companionship claim. As a result, the Court ordered that both parties would be entitled to statutory attorney fees on each of their successful claim or defense.

If you should have any questions regarding this article or insurance litigation in general, please contact Brad Matthiesen at bmatthiesen@mwl-law.com.

Bradley W. Matthiesen

Bradley W. Matthiesen is an insurance trial lawyer and partner with the law firm of Matthiesen, Wickert & Lehrer, S.C. He is licensed to practice in Arizona and Wisconsin. He has been an insurance defense trial attorney for the past 40 years. He also serves as a mediator throughout the State of Wisconsin and Arizona.