Case Title: John L. Gorton v. Hostak

Citation: 

Docket Number: 1996AP002776

State: wisconsin

Court: Wisconsin Supreme Court

Date: 1998-05-06T00:00:00Z

Document:
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
96-2776 
 
 
Complete Title 
of Case: 
 
 
John L. Gorton, Thomas Hauch, Timothy Hauch and 
Michael Vander Leest,  
 
Plaintiffs-Respondents-Cross-Appellants, 
 
v. 
Hostak, Henzl & Bichler, S.C., f/k/a Thompson & 
Coates, Ltd., and Robert H. Bichler,  
 
Defendants-Appellants-Cross-Respondents. 
  
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
Opinion Filed: 
May 6, 1998 
Submitted on Briefs: 
 
Oral Argument: 
March 4, 1998 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Walworth 
 
JUDGE: 
Michael S. Gibbs 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating: Wilcox, J., did not participate 
 
 
ATTORNEYS: 
For the defendants-appellants-cross respondents 
there were briefs by Robert H. Bichler, Kenneth F. Hostak, Thomas 
M. Devine, JoAnne Breese-Jaeck and Hostak, Henzl & Bichler, S.C., 
Racine and oral argument by Robert H. Bichler.  
 
 
For the plaintiffs-respondents-cross appellants 
there were briefs by Jon P. Axelrod, Joseph A. Ranney and DeWitt 
Ross & Stevens, S.C., Madison and oral argument by Jon P. 
Axelrod. 
 
No.  96-2776 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 96-2776 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
John L. Gorton, Thomas Hauch, Timothy  
Hauch and Michael Vander Leest,  
 
          Plaintiffs-Respondents-Cross- 
          Appellants, 
 
     v. 
 
Hostak, Henzl & Bichler, S.C., f/k/a  
Thompson & Coates, Ltd., and Robert H.  
Bichler,  
 
          Defendants-Appellants-Cross- 
          Respondents.  
FILED 
 
MAY 6, 1998 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
APPEAL from a judgment of the Circuit Court for Racine 
County, Michael S. Gibbs, Judge.  Affirmed in part and reversed 
in part. 
¶1 
ANN WALSH BRADLEY, J.    This case is before the court 
upon certification from the court of appeals.  The circuit court1 
concluded that a statutory award of reasonable attorney fees 
under Wis. Stat. § 100.18(11)(b)2 (1989-90) in the underlying 
action belongs to the plaintiffs and that each plaintiff is also 
entitled to $100 for attorney fees as a statutory item of costs. 
 Additionally, the circuit court denied the plaintiffs' request 
for an award of attorney fees in pursuing this subsequent 
declaratory action. 
                     
1 Circuit Court for Racine County, Michael S. Gibbs, Judge.  
No.  96-2776 
 
2 
¶2 
Because we determine that the question of who owns the 
statutory award of reasonable attorney fees under Wis. Stat. 
§ 100.18(11)(b)2 is ultimately controlled by the terms of the 
contract between the parties, which here give ownership to the 
plaintiffs, and that the award of attorney fees in declaratory 
actions should not extend to the facts of this case, we affirm 
part of the circuit court's judgment.  However, because the 
plaintiffs' claim represents a single cause of action, we 
reverse that part of the circuit court's judgment which awarded 
attorney fees as a statutory item of costs to each named 
plaintiff. 
¶3 
The court of appeals certifies two questions of first 
impression to this court pursuant to Wis. Stat. § (Rule) 809.61 
(1995-96).2  First, when an attorney and a plaintiff are parties 
to a contingent fee agreement, does a statutory award of 
reasonable attorney fees pursuant to Wis. Stat. § 100.18 belong 
to "the person suffering the pecuniary loss" or to the 
representative attorney?  Second, do principles of equity apply 
to a Wis. Stat. § 806.04(8) award of appellate counsel fees when 
the client suing a trial attorney has already been made more 
than whole for damages sought in the circuit court proceedings? 
 Finally, we also consider whether multiple partners in a 
lawsuit on behalf of a partnership may each collect $100 
attorney fees as statutory items of cost under Wis. Stat. 
§§ 814.01(1) and 814.04(1)(a).   
                     
2 Unless otherwise noted, all future statutory references 
are to the 1995-96 volumes.  
No.  96-2776 
 
3 
¶4 
The facts of this case are not in dispute.  In 1990, 
Gorton Farms, a general partnership consisting of the four 
plaintiff-farmers, retained the defendant law firm (in which 
defendant Bichler is a partner) to pursue American Cyanamid Co. 
("Cyanamid") for damages done to the plaintiffs' crops by a 
Cyanamid agricultural product.3  The contingent fee contract of 
the parties, signed by plaintiff Gorton on behalf of Gorton 
Farms, entitled the defendant firm to 40% of the gross amount of 
any recovery "obtained after a lawsuit which involves an 
appeal." 
¶5 
The case proceeded to a jury trial and the jury 
returned a verdict in favor of the plaintiffs.  The jury 
assessed the damage to Gorton Farms at $129,300 and also awarded 
punitive damages in the amount of $50,000.  After granting a 
post-trial motion for costs pursuant to Wis. Stat. § 814.036,4 
the circuit court entered a judgment for the plaintiffs in the 
amount of $199,885.24. 
¶6 
On post-verdict motion, the plaintiffs also contended 
that by making misrepresentations in the sale of the offending 
agricultural product, Cyanamid violated Wis. Stat. § 100.18.5  
                     
3 A full description of the underlying case may be located 
at Gorton v. American Cyanamid Co., 194 Wis. 2d 203, 533 N.W.2d 
746 (1995).  
4 Wis. Stat. § 814.036 provides: 
Omnibus costs provision.  If a situation 
arises in which the allowance of costs is 
not covered by ss. 814.01 to 814.035, the 
allowance shall be in the discretion of the 
court.   
5 Wis. Stat. § 100.18 (1989-90) provides in pertinent part: 
No.  96-2776 
 
4 
The circuit court agreed and awarded Gorton Farms an additional 
$307,421.25 in reasonable attorney fees, making the total 
judgment against Cyanamid $507,306.49.  
¶7 
Cyanamid appealed the judgment.  During the pendency 
of 
the 
appeal 
the 
defendant 
firm 
apparently 
sought 
to 
renegotiate its contingent fee agreement with Gorton Farms based 
on the firm's pursuit of attorney fees on the Wis. Stat. 
§ 100.18 claim.  However, the record does not reflect any actual 
change in the contractual agreement.  The court of appeals 
affirmed the order of the circuit court and the plaintiffs were 
awarded additional reasonable attorney fees based on the 
appellate litigation. 
                                                                  
(11)(b)2. 
Any 
person 
suffering 
pecuniary loss because of a violation of 
this section by any other person may sue in 
any court of competent jurisdiction and 
shall recover such pecuniary loss, together 
with costs, including reasonable attorney 
fees.  
 
As indicated by Wis. Stat. § 990.01(26), for purposes of 
statutory 
construction, 
the 
term 
"person" 
includes 
"all 
partnerships, associations and bodies politic or corporate."  
Thus, as the circuit court in the underlying action determined, 
the Gorton Farms partnership could be injured and recover under 
Wis. Stat. § 100.18(11)(b)2. 
However, 
under 
Wisconsin 
civil 
pleadings 
practice 
a 
partnership  may not assert its own cause of action.  Rather, in 
any action based on a cause of action owned by a partnership, 
each individual partner must be joined as a necessary and 
indispensable party.  See Karp v. Coolview of Wisconsin, Inc., 
25 Wis. 2d 299, 304, 130 N.W.2d 790 (1964).  Thus, while it was 
the partnership of Gorton Farms that was injured in the 
underlying action, the named plaintiffs there, as here, are the 
four individual general partners, suing on the partnership's 
cause of action. 
No.  96-2776 
 
5 
¶8 
The plaintiffs, represented by new counsel, then filed 
a declaratory action against the defendant firm seeking for 
Gorton Farms 60% of all monies to be tendered by Cyanamid, 
including 60% of the $711,833.05 in reasonable attorney fees and 
interest, as awarded by the circuit court in the underlying 
action.  The plaintiffs also asked for actual and reasonable 
attorney fees arising from this suit against the defendant firm 
pursuant to Wis. Stat. § 806.04(8).6   
¶9 
Shortly thereafter, Cyanamid tendered a check to the 
defendant firm's trust account for $1,045,487.27.  This amount 
included all assessed damages, costs, attorney fees, and 
applicable interest in the underlying action.  Both parties to 
the declaratory action moved for summary judgment.   
¶10 The circuit court determined that the contingent fee 
contract between the parties controlled allocation of the Wis. 
Stat. § 100.18 attorney fees award in this case and granted 
summary judgment in favor of the plaintiffs.  The plaintiffs 
were then awarded 60% of all amounts received from Cyanamid in 
                     
6 Wis. Stat. § 806.04(8) states:  
SUPPLEMENTAL RELIEF.  Further relief based 
on a declaratory judgment or decree may be 
granted whenever necessary or proper.  The 
application therefor shall be by petition to 
a court having jurisdiction to grant the 
relief.  
If the 
application be 
deemed 
sufficient, the court shall, on reasonable 
notice, require any adverse party whose 
rights 
have 
been 
adjudicated 
by 
the 
declaratory judgment or decree, to show 
cause why further relief should not be 
granted forthwith. 
  
No.  96-2776 
 
6 
the underlying action.7  The circuit court also awarded each of 
the four plaintiff-partners $100 as items of costs for attorney 
fees pursuant to Wis. Stat. §§  814.01(1) and 814.04(1)(a).8  
However, the circuit court denied the plaintiffs' request for 
supplemental relief in the form of further attorney fees arising 
from the declaratory action pursuant to Wis. Stat. § 806.04(8). 
¶11 The defendant firm appealed the circuit court's grant 
of summary judgment determining ownership of the attorney fees 
and the assessment of $400 for attorney fees as items of costs, 
while the plaintiffs cross-appealed the circuit court's denial 
of the requested additional attorney fees as supplemental 
relief.  The court of appeals certified the case and we accepted 
certification for review of all issues raised before the court 
of appeals. 
¶12 This court reviews a grant of summary judgment using 
the same methodology as the circuit court.  See State ex rel. 
Auchinleck v. Town of LaGrange, 200 Wis. 2d 585, 591-92, 547 
N.W.2d 587 (1996).  Where, as here, there are no material facts 
                     
7 Prior to the circuit court's ruling, the defendant firm 
released to the plaintiffs all amounts attributable to the 
plaintiffs' damage award, the punitive damage award, the double 
taxable and discretionary costs award, the supplemental cost 
judgment, and all attributable interest.  After the circuit 
court's ruling, the defendant firm released additional funds 
from the trust fund to comply with the circuit court's order, 
while reserving the right to appeal.  
8 Wis. Stat. § 814.04(1) provides in pertinent part: 
ATTORNEY 
FEES. 
 
(a) 
When 
the 
amount 
recovered or the value of the property 
involved is $1,000 or over, attorney fees 
shall be $100 . . . .  
No.  96-2776 
 
7 
in dispute, we must determine whether the movant is entitled to 
judgment as a matter of law.  See id. at 592.  This case 
presents questions of statutory and contract interpretation.  We 
review such questions de novo.  See McEvoy v. Group Health Co-op 
of Eau Claire, 213 Wis. 2d 507, 517, 570 N.W.2d 397 (1997)  
(statutes); Ford Motor Co. v. Lyons, 137 Wis. 2d 397, 460, 405 
N.W.2d 354 (Ct. App. 1987)(contracts). 
I.   
¶13 We first determine which party is entitled to receive 
the reasonable attorney fees awarded by the circuit court 
pursuant to Wis. Stat. § 100.18 in the underlying action, the 
plaintiffs or the plaintiffs' attorney (the defendant firm).  
The plaintiffs claim that pursuant to the contingent fee 
agreement their partnership is entitled to 60% of all monies 
received, including the reasonable attorney fees award.  The 
defendant firm asserts that it alone deserves the attorney fees 
awarded in the underlying action.9  In resolving this issue, we 
                     
9 
Parties' 
Proposed 
Allocations 
of 
Fee Award 
 
Plaintiffs' Proposal 
(total sum of damage 
award 
+ 
statutory 
fee award → split 
60% 
(client), 
40% 
(firm)) 
 
Defendant 
Firm's 
Proposal 
(client 
keeps full damage 
award; firm keeps 
full statutory fee 
award) 
Plaintiffs 
$627,292 
$333,654 
 
Defendant Firm 
$418,195 
$711,833 
 
  
No.  96-2776 
 
8 
consider the statutory grant of reasonable attorney fees and the 
terms of the existing contract between Gorton Farms and the 
defendant firm. 
¶14 The express language of Wis. Stat. § 100.18(11)(b)2 is 
dispositive of the first step of our analysis.  Wisconsin Stat. 
§ 100.18(11)(b)2 (1989-90) states: 
 
Any person suffering pecuniary loss because of a 
violation of this section by any other person . . . 
shall recover such pecuniary loss, together with 
costs, including reasonable attorney fees. 
¶15 The statute expressly indicates that it is the "person 
suffering pecuniary loss" to whom the legislature directs the 
recovery of reasonable attorney fees, not the representative 
attorney.  The defendant firm has suffered no pecuniary loss 
attributable to Cyanamid.  Thus, under the statute it is Gorton 
Farms that is entitled to recover the entire award of reasonable 
attorney fees.10 
                     
10 The defendant firm contends that such a distribution of 
the reasonable attorney fees pursuant to the statute constitutes 
an unethical sharing of legal fees in violation of SCR 20:5.4.  
This argument is raised for the first time on appeal.  Because 
it was not raised before the circuit court, it is waived for 
purposes of our review.  See Terpstra v. Soiltest, Inc., 63 
Wis. 2d 585, 593, 218 N.W.2d 129 (1974). 
The defendant firm also defends what it seems to believe is 
an implicit allegation that the defendant firm violated the 
Candor Toward a Tribunal ethical requirement of SCR 20:3.3.  We 
decline to address arguments which neither go to a material 
issue in this matter, nor address ethical charges raised before 
any tribunal of this state. 
  
No.  96-2776 
 
9 
¶16 The defendant firm points to Shands v. Castrovinci, 
115 Wis. 2d 352, 340 N.W.2d 506 (1983), in claiming entitlement 
to 100% of the reasonable attorney fees.  The plaintiff in 
Shands, while represented by a legal services organization, 
successfully sued 
a defendant-landlord 
and 
prevailed 
upon 
appeal.  However, the plaintiff's request for appellate attorney 
fees under Wis. Stat. § 100.20(5)(1981-82) was denied.  This 
court reversed and determined that the plaintiff could recover 
appellate attorney fees under the applicable statute based on 
the public policy underpinnings of the fee statute.  See Shands, 
115 Wis. 2d at 358-59.   
¶17 In reaching this result in Shands, we considered 
whether the statutory fee award could be awarded to a plaintiff 
receiving 
free 
legal 
representation 
from 
a 
legal 
aid 
organization.  We determined that plaintiffs "are entitled to an 
attorney fees award even when they are represented at no charge 
by a legal services organization."  Id. at 361.  We subsequently 
noted, however, "that the attorney fees award is the property of 
the organization providing the legal services."  Id.  We reached 
this result based on the public policy of assisting nonprofit 
legal organizations in taking cases that serve the public 
interest 
without remuneration 
directly 
from 
the 
aggrieved 
client.  See Shands, 115 Wis. 2d at 360-61; see also Richland 
School Dist. v. DILHR, 174 Wis. 2d 878, 913, 498 N.W.2d 826 
(1993). 
¶18 The defendant firm's reliance on Shands ignores a 
significant distinction between this case and Shands.  In this 
No.  96-2776 
 
10
case 
the 
defendant 
firm 
provided 
representation 
to 
the 
plaintiffs on the basis of a contingent fee agreement which 
provides for the payment of private attorney fees.  In Shands 
there was no contract for fees.  The public policy endorsed in 
Shands allowing the recovery of attorney fees by a nonprofit 
legal service organization in the absence of a fee agreement 
does not apply in a fee agreement setting.  Thus, we determine 
that the express language of Wis. Stat. § 100.18(11)(b)2 is not 
affected by Shands and that the plaintiffs, suing in place of 
the partnership, are entitled to the attorney fees award.   
¶19 The initial vesting of the reasonable attorney fees 
with the plaintiffs does not mean that the plaintiffs will 
necessarily retain the entire fee portion of the award.  As the 
plaintiffs tacitly acknowledge in demanding only 60% of the 
award of reasonable attorney fees, where a plaintiff is 
represented by counsel pursuant to the terms of a fee agreement 
with such counsel, that agreement can control the ultimate 
disposition of statutory fee awards.11  Because the scope of 
                     
11 The plaintiffs assert that Venegas v. Mitchell, 495 U.S. 
82 (1990), creates a "universal rule" that statutory attorney 
fees belong solely to the client and are subsequently always 
divisible pursuant to a fee agreement between a client and an 
attorney. 
 
Venegas 
rested 
its 
holding 
upon 
statutory 
interpretation of a federal statute, 42 U.S.C. § 1988.  In 
contrast, our determination requires statutory interpretation of 
Wis. Stat. § 100.18(11)(b).  Accordingly, while illustrative of 
one approach, Venegas is not controlling authority to the 
inquiry presented here. 
  
No.  96-2776 
 
11
retainer agreements varies from attorney to attorney and case to 
case, such inquiries are necessarily fact intensive. 
¶20 We turn then to examine the terms of the contract 
between the parties.  Plaintiff Gorton, on behalf of Gorton 
Farms, engaged the defendant firm to represent the partnership 
in its suit against Cyanamid under the terms of a contingent fee 
agreement drafted by the defendant firm.  It provides, in 
relevant part: 
 
Gorton Farms, Inc. (Client) retains Thompson & 
Coates, Ltd. (Attorneys) to represent it to institute, 
prosecute and adjust the claims which Client has 
against American Cyanamid Company and any liability 
insurance company or other person legally responsible 
for damages sustained by Client as a result of the use 
of Scepter on Client's farmlands in the years of 1987 
and 1988. 
 
Attorneys' fees shall be owing only if a recovery 
is made.  The Attorneys' fees shall be a portion of 
the gross amount recovered, as follows:  
 
(1)  One third (1/3) of amount recovered, or 
 
(2)  Forty percent (40%) if obtained after a 
lawsuit which involves an appeal. 
¶21 In 
interpreting 
contracts, 
we 
must 
attempt 
to 
ascertain the intent of the parties.  See State ex. rel. 
Journal/Sentinel Inc. v. Pleva, 155 Wis. 2d 704, 711, 456 N.W.2d 
359 (1990).  Where the terms of a contract are clear and 
unambiguous, we construe the contract according to its literal 
terms.  See Eden Stone Co., Inc. v. Oakfield Stone Co., Inc., 
166 Wis. 2d 105, 115, 479 N.W.2d 557 (Ct. App. 1991).  However, 
when the contractual terms are "reasonably . . . susceptible to 
No.  96-2776 
 
12
more than one construction," the contract is ambiguous.  Maas v. 
Ziegler, 172 Wis. 2d 70, 79, 492 N.W.2d 621 (1992).  In such 
instances, any ambiguity is to be interpreted against the 
drafter.  See Dairyland Equip. Leasing, Inc. v. Bohen, 94 Wis. 
2d 600, 609, 288 N.W.2d 852 (1980).  This is particularly true 
where a substantial disparity of bargaining power exists between 
the parties or a standard form is supplied by the drafting 
party.  See Goebel v. First Federal Sav. and Loan Ass'n, 83 Wis. 
2d 668, 675, 266 N.W.2d 352 (1978). 
¶22 The defendant firm presents a two-level argument that 
the reasonable attorney fees awarded by the circuit court are 
not subject to the contingent fee agreement.  First, the 
defendant claims that the "gross amount recovered" language is 
"at best ambiguous," thereby calling into question whether it 
includes 
recovered 
attorney 
fees. 
 
See, 
e.g., 
Luna 
v. 
Gillingham, 789 P.2d 801 (Wash. App. 1990)(determining that 
contract for "gross recovery" ambiguous as to inclusion of 
attorney fees).  Second, the defendant firm asserts that the 
contract does not cover the Wis. Stat. § 100.18 claim against 
Cyanamid.  In support of this argument the defendant firm argues 
in the alternative that the contract unambiguously creates a 
contract only for representation on the product liability claim 
and also asserts the existence of a mutual mistake.  
¶23 The meaning of the "gross amount recovered" language 
is pivotal to the interpretation of the contract in this case.  
While the term is not explicitly defined within the four corners 
of the contract, dictionary definitions are dispositive of the 
No.  96-2776 
 
13
ordinary meanings ascribed to contract terms.  See Ervin v. City 
of Kenosha, 159 Wis. 2d 464, 484, 464 N.W.2d 654 (1991).  As the 
plaintiffs point out, "gross" is defined as "an overall total 
exclusive of deductions." Webster's Third New International 
Dictionary, 1002 (1986).  "Recovery" is defined as "the 
obtaining in a suit at law of a right to something by a verdict, 
decree, or judgment of court."  Id. at 1898.  The plaintiffs 
assert 
that 
"gross 
amount 
recovered" 
means 
all 
amounts 
recovered, including attorney fees.12 
¶24 The defendant firm points to language in an antecedent 
paragraph, "for damages sustained by Client as a result of the 
use of Scepter on Client's farmlands . . . " in arguing that the 
gross recovery language must be read in the context of the 
larger contract and that only amounts recovered on a product 
liability claim are covered by the contract.  See North Gate 
Corp. v. National Food Stores, Inc., 30 Wis. 2d 317, 321, 140 
N.W.2d 744 (1966).  We disagree that this language conclusively 
limits 
the 
attorney 
representation 
to 
a 
single 
products 
liability cause of action.  To the extent any ambiguity exists, 
                     
12 The plaintiffs also asserted at oral argument that the 
Venegas Court interpreted the identical contractual language of 
"gross amounts recovered" presented here to include statutory 
attorney fees.  The Venegas Court addressed the effect of a 
statutory fee award in a contingent fee agreement and the 
reasonableness of the terms of that agreement.  While that Court 
ultimately concluded that "a 40% contingent fee is reasonable in 
this case," Venegas, 495 U.S. at 534, the Court did not address 
whether "gross amounts recovered" should be interpreted to 
include statutory attorney fees.  Thus, Venegas does not create 
the bright-line interpretation of "gross amounts recovered" 
asserted by the plaintiffs in this case.  
No.  96-2776 
 
14
its onus is borne by the drafter.  See Dairyland Equip. Leasing, 
94 Wis. 2d at 609. 
¶25 This is particularly true where the drafter is an 
attorney.  Unlike attorneys, clients may not possess the legal 
acumen or experience necessary to understand the potential 
ramifications that a particular fee agreement may have on a 
lawsuit.  Unlike attorneys, clients may not appreciate that 
there are other sources of attorney compensation available in 
some instances.  Thus, the burden is on the attorney who 
possesses legal knowledge and who drafts the agreement to state 
clearly the terms 
of the 
fee agreement 
and 
to address 
specifically the allocation of court-awarded attorney fees.  See 
also Hamilton, 636 F.2d at 749. 
¶26 The defendant firm additionally asserts, however, that 
the contract is voidable based on mutual mistake.  A mutual 
mistake is "one reciprocal and common to both parties, where 
each alike labors under a misconception in respect to the terms 
of the  written instrument."  Continental Cas. Co. v. Wisconsin 
Patients Compensation Fund, 164 Wis. 2d 110, 117, 473 N.W.2d 584 
(Ct. App. 1991).  The mistake alleged by the defendant firm is 
that neither party "knew of the past violations of § 100.18 
which 
had 
generated 
a 
then-existing 
right 
for 
statutory 
attorneys' fees."  Defendants' reply brief at 5. 
¶27 This alleged "mutual mistake" does not relieve the 
defendant of its obligations under the contingent fee agreement. 
 "Mutual mistake must be based upon a past or present, not a 
future, fact.  Future facts rest in conjecture and both parties 
No.  96-2776 
 
15
are assumed responsible for considering the possibility that 
such facts may occur."  Continental Cas. Co., 164 Wis. 2d at 118 
(citation omitted).  The defendant firm's failure to consider 
the possibility that the facts of this case might give rise to 
an additional compensable claim for attorney fees may indicate a 
lack of full consideration of the plaintiffs' potential claims, 
but it does not indicate a mutual mistake.   
¶28 As noted, the circuit court's award of reasonable 
attorney fees under Wis. Stat. § 100.18 in the underlying action 
is subject to the contract between Gorton Farms and the 
defendant firm.13  Thus, we agree with the plaintiffs' demand 
that the Gorton Farms partnership is entitled to retain 60% of 
the "gross amount recovered," including the reasonable attorney 
fees awarded under Wis. Stat. § 100.18. 
                     
13 The defendant firm also claims that it is entitled to the 
full award of reasonable attorney fees based on the principles 
of quantum meruit and implied contract.  An attorney may have a 
claim in quantum meruit or implied contract where "he renders 
services in addition to those contemplated by the contingent fee 
arrangement."  Martineau v. State Conservation Commission, 54 
Wis. 2d 76, 81, 194 N.W.2d 664 (1972).  However, because we 
determine that distribution of the reasonable attorney fees 
award is governed by the contract existing between the parties, 
quantum meruit and implied contract arguments are inapposite.  
See Schultz v. Andrus' Estate, 178 Wis. 358, 364, 190 N.W. 83 
(1922). 
Similarly, 
because 
the 
plaintiffs 
are 
contractually 
entitled to the fee award, and did not receive it due to "actual 
or 
constructive 
fraud, 
duress, 
abuse 
of 
a 
confidential 
relationship, 
mistake, 
commission 
of 
a 
wrong, 
or 
other 
unconscionable 
conduct," 
defendant 
firm's 
request 
for 
a 
constructive trust cannot be granted.  M&I First Nat. Bank v. 
Episcopal Homes Management, Inc., 195 Wis. 2d 485, 512, 536 
N.W.2d 175 (Ct. App. 1995).  
No.  96-2776 
 
16
II. 
¶29 Because we determine that the plaintiffs are entitled 
to 60% of the gross amount recovered, including reasonable 
attorney fees, in the underlying lawsuit against Cyanamid, we 
must next address the plaintiffs' cross-appeal from the refusal 
of the circuit court immediately below to grant the plaintiffs 
actual attorney fees against the defendant firm in this 
subsequent declaratory action.  The parties dispute whether 
attorney fees are available, and if they are, whether principles 
of equity apply to a Wis. Stat. § 806.04(8) award of attorney 
fees when the plaintiff has already been made more than whole. 
¶30 As an initial matter, we note that this state 
continues to adhere to the American Rule on the award of 
attorney fees. See Wisconsin Retired Teachers Ass'n v. Employe 
Trust Funds Bd., 207 Wis. 2d 1, 36, 558 N.W.2d 83 (1997).  
"[T]he prevailing litigant is generally not entitled to collect 
attorney's fees from the opposing party as damages or costs."  
Winkelman v. Beloit Memorial Hosp., 168 Wis. 2d 12, 28, 483 
N.W.2d 211 (1992).  An award of attorney fees may be obtained 
"only where such fees are authorized by statute or contract, or 
where they are the natural and proximate result of a wrongful 
act by the defendant which subjects the plaintiff to litigation 
with a party other than the defendant."  Id.; see Milwaukee 
Teachers' Educ. Ass'n v. Milwaukee Bd. of School Directors, 147 
Wis. 2d 791, 796-97, 433 N.W.2d 669 (Ct. App. 1988). 
¶31 The plaintiffs rely upon Wis. Stat. § 806.04(8) as a 
statutory basis for circumventing the American Rule.  Wisconsin 
No.  96-2776 
 
17
Stat. § 806.04(8) indicates that in declaratory actions further 
relief beyond the requested declaration of rights "may be 
granted whenever necessary or proper."  Turning then to this 
court's decision in Elliott v. Donahue, 169 Wis. 2d 310, 485 
N.W.2d 403 (1992), the plaintiffs allege that "attorney fees are 
to be awarded where one of the parties assumes a fiduciary or 
other independent duty to the other party as part of their 
relationship."  Plaintiffs' brief at 7.  Pointing to the 
attorney-client fiduciary relationship that existed in this 
case, the plaintiffs argue that Elliott required the circuit 
court to award attorney fees to them when the defendant firm 
breached its fiduciary duty to them. 
¶32 The Elliott case arose when an automobile liability 
insurer reneged on its contractual obligation to defend a third-
party suit.  The insured retained independent counsel who 
established that coverage existed under the policy.  See 
Elliott, 169 Wis. 2d at 315.  The insured asked for attorney 
fees and we determined that Wis. Stat. § 806.04(8) "permits a 
recovery of attorney fees . . . because the recovery is proper 
under the principles of equity."  Id. at 324.  We reached this 
decision because "[t]he insurer that denies coverage and forces 
the insured to retain counsel and expend additional money to 
establish coverage for a claim that falls within the ambit of 
the insurance policy deprives the insured the benefit that was 
bargained for . . . ."  Id. at 322. 
¶33 However, while we have subsequently acknowledged that 
"Elliott stands for the proposition that courts have the 
No.  96-2776 
 
18
equitable power to award attorney's fees to insureds in limited 
circumstances," DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 
559, 569, 547 N.W.2d 592 (1996), we have expressly declined "to 
extend Elliott beyond its particular facts and circumstances."  
Id.  Elliott remains the only instance in which this court has 
interpreted Wis. Stat. § 806.04(8) to allow a grant of attorney 
fees.  Accordingly, we decline to adopt the rule proposed by the 
plaintiffs that in every instance of a suit between a fiduciary 
and a beneficiary the prevailing beneficiary is entitled to 
attorney fees under Wis. Stat. § 806.04(8). This refusal is 
consistent with our history of crafting only "limited and 
narrow" exceptions to the American Rule.  See Milwaukee 
Teachers' Educ. Ass'n, 147 Wis. 2d at 797.14 The circuit court 
correctly denied the plaintiffs' request for supplemental relief 
in the form of reasonable attorney fees under Wis. Stat. 
§ 806.04(8). 
III. 
¶34 Finally, 
the defendant firm 
also 
challenges the 
circuit court's approval of attorney fees of $100 as items of 
costs to each of the four named plaintiffs pursuant to Wis. 
Stat. §§ 814.01(1) and 814.04(1)(a).  The defendant firm 
contends that because the plaintiffs are partners in the damaged 
farming enterprise, there is really only one cause of action and 
                     
14 Because attorney fees are not available as supplemental 
relief in this instance, we do not reach the parties' arguments 
in equity.  
No.  96-2776 
 
19
the circuit court should have levied only a single $100 cost 
award.  
¶35 As an initial matter, we note that Wis. Stat. 
§ 814.01(1) states that "[e]xcept as otherwise provided in this 
chapter, costs shall be allowed of course to the plaintiff upon 
a recovery."  The statute refers to "the plaintiff" only in the 
singular and does not address cost awards where there are 
multiple named plaintiffs to a lawsuit. 
¶36 Despite the absence of explicit statutory guidance, 
our courts have previously considered application of Wis. Stats. 
§§ 814.01(1) and 814.04(1)(a) to cases where multiple plaintiffs 
were pursuing multiple independent causes of action.  In such 
cases, our courts have declared each plaintiff entitled to bring 
an individual cause of action to also be entitled to a separate 
$100 cost award in the form of attorney fees.  See Gospodar v. 
Milwaukee Auto Ins. Co., 249 Wis. 332, 24 N.W.2d 676 (1946); 
Hansberry v. Dunn, 230 Wis. 626, 284 N.W. 556 (1939); Zintek v. 
Perchik, 163 Wis. 2d 439, 471 N.W.2d 522 (Ct. App. 1991), 
overruled on other grounds, Steinberg v. Jensen, 194 Wis. 2d 
439, 534 N.W.2d 361 (1995). 
 
¶37 As noted earlier, in this case the plaintiffs are not 
pursuing a joint suit based on multiple causes of action that 
they each could have pursued individually.  Rather, they are 
suing as necessary and indispensable parties to a single cause 
of action actually adhering to their Gorton Farms partnership.  
It was the partnership, not the partners, that retained the 
No.  96-2776 
 
20
defendant firm.  It was the partnership, not the partners, that 
sustained damage through use of Cyanamid's product. 
 
¶38 Because there is really only one cause of action 
asserted here, only one award of $100 attorney fees as an item 
of costs is available.  To hold otherwise would make the cost 
award in partnership cases solely dependent upon the number of 
partners in the partnership. 
¶39 Moreover, 
our 
conclusion 
is 
buttressed 
by 
the 
statutory treatment given to claims for costs made by multiple 
successful defendants.  Wisconsin Stat. § 814.03 allows multiple 
defendants to recover individual costs only "where there are 
several defendants who are not united in interest and who make 
separate defenses by separate answers . . . ."  This test is 
similar to the approach of focusing on the existence of multiple 
causes of action for plaintiffs as evinced by Gospodar and 
Zintek.  Accordingly, we determine that Wis. Stat. §§ 814.01(1) 
and 814.04(1)(a) will not allow for multiple awards of $100 in 
this case. 
IV. 
¶40 A statutory award of reasonable attorney fees pursuant 
to Wis. Stat. § 100.18 belongs to the person suffering the 
pecuniary loss.  However, the ultimate ownership of that award 
may be controlled by the terms of the contingent fee agreement 
between the parties.  Under the terms of this contract, the 
plaintiffs are entitled to 60% of those attorney fees. 
¶41 Although the plaintiffs are entitled to attorney fees 
in the underlying action, they are not awarded attorney fees in 
No.  96-2776 
 
21
this declaratory action.  Wisconsin Stat. § 804.06(8) does not 
provide for an award of attorney fees as supplemental relief on 
the facts presented here.  Because the American Rule applies, 
the circuit court correctly denied the plaintiffs' request for 
additional attorney fees.    
¶42 Finally, 
the 
circuit 
court's 
judgment 
in 
the 
proceedings immediately below to grant statutory attorney fees 
of $100 per plaintiff was error.  Wisconsin Stat. §§ 814.01(1) 
and 814.04(1)(a) do not allow multiple $100 attorney fee awards 
from a single cause of action.  Accordingly, the judgment of the 
circuit court is affirmed in part and reversed in part. 
By the Court.—The judgment of the circuit court is affirmed 
in part and reversed in part. 
 
¶43 JON P. WILCOX, J. did not participate. 
 
 
 
1