In the

United States Court of Appeals

For the Seventh Circuit

Nos. 10-2600 & 10-3571

BERNADINE E. MATTHEWS,

Plaintiff-Appellant,

v.

WISCONSIN ENERGY CORPORATION, INC.,

f/k/a WISCONSIN GAS COMPANY,

Defendant-Appellee.

Appeals from the United States District Court

for the Eastern District of Wisconsin.

No. 05-C-537—J. P. Stadtmueller, Judge.

ARGUED APRIL 1, 2011—DECIDED JUNE 1, 2011

Before EASTERBROOK, Chief Judge, and BAUER and

EVANS, Circuit Judges.

EVANS, Circuit Judge. We last saw this case just over

three years ago when we remanded it for further proceedings on a single issue—breach of contract. A grant of

summary judgment against Matthews on retaliation

under Title VII was affirmed. Matthews v. Wis. Energy

Corp., Inc., 534 F.3d 547 (7th Cir. 2008) (Matthews I).
2 Nos. 10-2600 & 10-3571

WEC was formerly known as Wisconsin Gas Company.

1

Bernadine Matthews, a former employee of Wisconsin

Energy Corporation, Inc. (WEC), sued WEC, alleging it

violated a settlement agreement by breaching a “referencerequest provision.” On remand, a jury sided with WEC,1

and now Matthews appeals for the second time.

Because a jury has rendered a verdict, we view the

evidence in the light most favorable to that verdict. Cruz

v. Town of Cicero, Ill., 275 F.3d 579, 583 (7th Cir 2001). Here

are the facts.

Matthews was employed by WEC from 1980 to 1999.

When she left WEC, the parties entered into an agreement that included provisions regarding how WEC

would respond to reference requests about her from

prospective employers. In 2003, Matthews sued WEC

alleging that it breached those provisions. To resolve

that suit, the parties entered into a confidential settlement agreement (the Agreement) which addressed the

information WEC would disclose to prospective employers:

Wisconsin Gas agrees to respond to any request for

a reference regarding Matthews in a manner that is

consistent with the Wisconsin Gas policy in place

regarding reference checks at the time. Wisconsin

Gas will not respond to any request for a reference

regarding Matthews by indicating that Matthews

was terminated or fired from Wisconsin Gas.

WEC’s policy regarding reference requests was to

confirm that the individual had worked there, and to
Nos. 10-2600 & 10-3571 3

provide the dates of employment, salary, and position. WEC would not release any subjective information about the former employee’s performance.

In May 2005, Matthews filed this lawsuit, alleging

that WEC breached the Agreement’s reference-request

provision by failing to properly verify her employment twice in 2004. A few days prior to filing the suit,

Matthews, in an effort to find a new job, enrolled in

a Social Security Administration (SSA) program called

the “Ticket to Work Program” which allows disabled

individuals receiving social security benefits to work

while continuing to receive their benefits. See generally,

The Ticket Program: What is the Ticket Program?, http://

www.yourtickettowork.com/program__info. (last visited

May 19, 2011).

In accordance with the program, Matthews hired

Howard Schwartz, President and CEO of Career Consulting Services of America (CCSA), a consultant who

specializes in helping disabled individuals seek employment through the Ticket To Work Program. Matthews

signed a SSA Consent and Release of Information

form, giving Schwartz permission to talk to third parties

about information he determined was relevant to her

job search. She also signed a Confidential Information

Release Authorization (CIRA), which was specific to

Schwartz’s company. Under the CIRA, she voluntarily

consented to the disclosure to CCSA of information

related to her personal background, health, employment, education and other data, and specifically granted

Schwartz the right to contact her former employers to
4 Nos. 10-2600 & 10-3571

There was significant debate over whether Schwartz changed 2

Matthews’ resume as a result of a phone call with Lynne

English, in-house counsel at WEC, as Matthews claims, or if

he changed it prior to the call. WEC presented significant

evidence that the document was changed before the call.

Because we view the evidence in a light most favorable to

the jury verdict, we assume the document was changed before

Schwartz spoke with English.

Schwarz claims he sent an identical letter in the mail several 3

days earlier, but WEC never received it.

elicit personal information that he deemed potentially

helpful to the job search.

For several months, Schwartz had no luck finding

Matthews a job. He approached her about his difficulties,

and she claimed that WEC was blackballing her. When

Schwartz asked why, Matthews said she was unable to

discuss it because of the confidentiality provision in the

Agreement. She directed Schwartz to reach out to her

lawyer, Janet Heins. Schwartz called Heins who confirmed that Matthews had filed a lawsuit against WEC.

After his conversation with Heins, Schwartz revised

Matthews’ resume—removing her WEC employment

entirely. He sent the new resume to Heins and Matthews 2

for authorization and also called Heins to ask if he

could contact WEC for a reference. A few weeks later,

Heins called Schwartz authorizing him to contact WEC.

Schwartz then faxed a letter to Art Zintek, Vice-President

of Human Resources at WEC. The letter indicated

3

that CCSA was contracted by the SSA to assist Matthews
Nos. 10-2600 & 10-3571 5

in her job search and requested that WEC confirm

Matthews’ work history at WEC and provide comments

regarding her work performance. It also said that a

release authorizing WEC to provide the information

was enclosed, but Schwartz failed to include it.

When Zintek’s office received the fax, due to Matthews’

pending suit against WEC, it was forwarded to Lynne

English in the Legal Department because she had

handled the 2003 settlement agreement. In October 2005,

English called Schwartz to discuss his letter. During

the conversation, she told Schwartz that he had not

included a release. Schwartz said he would send the

release, but he also pushed English to answer his

reference request over the phone. She testified that she

told him she could not because “[Matthews] has sued us

for how we respond to reference requests,” or “we’re in

litigation with her.” English also informed Schwartz

that the written response to his reference request would

only provide basic information and would not include

the comments on Matthews’ performance he had requested. After the conversation, Schwartz sent English

the release form. WEC then mailed Schwartz a letter

verifying Matthews’ employment. At trial, Matthews

admitted that WEC’s response letter was substantially

correct.

In the first round of this case, the district judge granted

WEC’s motion for summary judgment as to all claims

and awarded it $173,232.44 in attorneys fees, pursuant

to the fee-shifting provisions in the Agreement. Matthews

appealed, and we affirmed the dismissal of all claims
6 Nos. 10-2600 & 10-3571

except the breach of contract claim predicated on

WEC’s communication with Schwartz. We remanded

the case for further proceedings on this issue and vacated

the award of attorney’s fees. Matthews I, 534 F.3d at 559-60.

On remand, a jury heard Matthews’ breach of contract

claim and returned a general verdict finding that WEC

did not breach the Agreement. The district judge

reinstated his 2007 fee award. WEC then filed a posttrial motion for additional attorney’s fees under the

Agreement, submitting redacted billing statements and

declarations from its outside counsel authenticating

them. The judge granted WEC’s motion—finding the

fees commercially reasonable and noting that WEC paid

the legal bills before the verdict, without any assurance

that they would be recouped—and awarded attorney’s

fees in the amount of $522,527.75 and nontaxable costs

and expenses in the amount of $40,493.64.

On this appeal, Matthews argues that the judge erred

by: (1) instructing the jury it could find that Matthews

waived enforcement of the Agreement; (2) refusing to

bifurcate the issues of breach and damages in the jury

instructions; (3) allowing the case to go the jury with an

agency instruction; and (4) awarding WEC attorney’s

fees and costs.

Matthews first claims that the judge erred when he

instructed the jury that it could find Matthews “waived”

enforcement of the Agreement by authorizing Schwartz

to elicit personal information about her. We review a

district judge’s decision regarding jury instructions for

abuse of discretion. Consumer Products Research & Design,
Nos. 10-2600 & 10-3571 7

Inc. v. Jensen, 572 F.3d 436, 438 (7th Cir. 2009). Moreover,

we will only grant a new trial if the verdict is against the

clear weight of the evidence. Tammi v. Porsche Cars North

America, Inc., 536 F.3d 702, 708 (7th Cir. 2008).

Matthews makes two arguments with regard to wavier. First, WEC failed to plead waiver as an affirmative defense, and therefore the judge erred by allowing

WEC to argue waiver and by including the instruction

about waiver. WEC notes, however, that Matthews

never pled—in her complaint or an amended complaint—the facts that give rise to the use of waiver as a

defense. Instead, Matthews seems to argue that WEC

should have preemptively pled wavier regarding the

conversation between English and Schwartz which had

not yet occurred when she filed her complaint. This

argument is meritless. WEC was not obligated to

forecast future events.

Furthermore, even if Matthews had included the

phone conversation in her complaint or an amended

complaint, we have previously held that the “rule that

forfeits an affirmative defense not pleaded in the answer

(or by an earlier motion) is, we want to make clear, not

to be applied rigidly.” Herremans v. Carrera Designs, Inc.,

157 F.3d 1118, 1123 (7th Cir. 1998). “The failure to plead

an affirmative defense in the answer works a forfeiture

only if the plaintiff is harmed by the defendant’s delay

in asserting it.” Carter v. United States, 333 F.3d 791, 796

(7th Cir. 2003). Here, Matthews has not argued that she

was prejudiced when the judge allowed WEC to argue

waiver as a defense. WEC did not call any new witnesses
8 Nos. 10-2600 & 10-3571

or introduce any new evidence as a result of the waiver

defense. All of the evidence at issue was in the possession of Matthews’ key witness, Schwartz. See Williams v.

Lampe, 399 F.3d 867, 871 (7th Cir. 2005) (finding that

where the plaintiff “does not suggest any prejudice to

her from the defendants’ delay [in asserting a defense]

other than her subsequent preparation for trail, the

court did not abuse its discretion in allowing the defense”).

Matthews also argues that the judge erred when he

gave a wavier instruction to the jury because the Agreement required waivers to be in writing. According to

Matthews, the provision of the Agreement—“The terms

of this Agreement may not be altered, amended, or waived

except by another written agreement signed by the

Parties”—should have rendered an instruction on

wavier a no-no. We disagree.

WEC never contended that the parties met and agreed

to modify the terms of the settlement agreement. The

sort of waiver question put to the jury concerned unilateral

waiver of entitlements under an unchanged contract.

WEC did not contend (and the instruction did not ask

the jury to find) that there had been a change in “the

terms” of the agreement (which is what the change-only-inwriting clause covers). It is common for people to forego

benefits that cannot be waived through a contract. For

example: No employee can agree with the employer

that the Age Discrimination in Employment Act will not

apply to the job in question; the statute’s benefits can’t

be waived or altered by contract. But anyone can

retire whenever he wants, and in that sense waive the
Nos. 10-2600 & 10-3571 9

statute’s benefits. That is how the instruction here

referred to “waiver.” The jury was not asked to find that

Matthews and WEC changed the terms of their agreement, so that in the future WEC could respond to inquiries

by telling other potential employers about Matthews’

litigation history or that Matthews had been fired.

The question put to the jury was whether Matthews

unilaterally authorized disclosure to Schwartz (who was

acting as her agent) on this one occasion. In that sense,

the giving of an instruction waiver was not error.

Matthews’ second claim is that the judge erred “by

refusing to bifurcate the issues of breach and damages

in the substantive jury instructions.” We review the

judge’s decision regarding jury instructions for abuse

of discretion. Jensen, 572 F.3d at 438. In his instructions,

the judge told the jury:

In order to prevail on her breach of contract claim,

Bernadine Matthews must prove each of the

following elements by a preponderance of the evidence:

First, the existence of a valid contract creating obligations between the parties;

Second, a material breach of the contract by Wisconsin

Energy, and

Third, damages to Bernadine Matthews flowing

naturally and probably from the breach.

Matthews argues that this instruction was improper

because the jury had to find damages before it could

find that a breach had occurred. But the instruction is
10 Nos. 10-2600 & 10-3571

in line with the elements of a breach of contract claim in

Wisconsin. See Matthews I, 534 F.3d at 553 (“The elements

for a breach of contract in Wisconsin are familiar; the

plaintiff must show a valid contract that the defendant

breached and damages flowing from that breach.”)

(citing Northwestern Motor Car, Inc. v. Pope, 51 Wis.2d

292, 296 (Wis. 1971)).

While we agree with Matthews that given the somewhat unusual fee-shifting provisions of the settlement

agreement it might have been wiser to more clearly

separate out the questions of breach and damages, we

are mindful of our duty to view jury instructions as a

whole. Jury instructions are considered “both in the

context of the other instructions given and in light of the

allegations of the complaint, opening and closing arguments and the evidence of record.” Lynch v. Belden & Co.,

Inc., 882 F.2d 262, 267 (7th Cir. 1989). Here, the judge

also instructed the jury that it must determine whether

WEC breached the settlement agreement, and that if it

found a breach but her damages had no monetary value,

it must return a verdict in her favor and award her

nominal damages. With that being the case, we cannot

conclude that the judge incorrectly instructed the jury on

the issue of breach and damages.

Next, Matthews claims that the judge abused his discretion when he allowed the case to go to the jury with

the instruction that it could find Schwartz was acting as

Matthews’ agent. Matthews argues that the evidence

was insufficient to support an agency instruction. This

argument fails for several reasons.
Nos. 10-2600 & 10-3571 11

First, the agency instruction Matthews now challenges

was submitted to the court in the parties’ Joint Final

Pretrial Report. WEC notes that—despite Matthews

claim to the contrary—this is one of the jury instructions upon which the parties agreed. Second, although Matthews correctly states that she objected to the

instruction, she misstates the reason for her objection.

Matthews’ objection acknowledges that:

[O]ne might also view Howard Schwartz as Matthews’

agent with the undertaking being that of placing her

in employment. The evidence elicited by [WEC] . . .

however, was designed to show that in requesting

a reference from WEC, Schwartz was not acting on

behalf of Matthews, but instead, at the behest of

Attorney Heins.

In no way does this objection undermine the instruction

on agency. In fact, it does exactly the opposite—

Matthews’ objection asserts that Schwartz is her agent,

working on her behalf, and not at the behest of Heins.

Similarly, Matthews read into evidence a stipulation that presumed Schwartz was her agent: “[T]he defendant will not argue that Mr. Schwartz’s status as

Ms. Matthews’ agent was negated by virtue of the fact that

she had previously assigned her ticket to work to the

Department of Vocational Rehabilitation.” Matthews also

signed CCSA’s waiver, granting Schwartz the authority

to elicit information on her behalf, which he did when

he spoke to attorney English. Therefore, while we agree

that these acknowledgments of agency are not dispositive of Schwartz’s status as Matthews’ agent, given the
12 Nos. 10-2600 & 10-3571

evidence presented a jury could reasonably find that

Schwartz was acting as Matthews’ agent and that, consequently, WEC did not breach the Agreement.

Finally, Matthews claims that the district judge erred

in awarding WEC $563,021.39 in attorney’s fees and

costs. We review a district court’s award of attorney’s

fees and costs for abuse of discretion. TruServ Corp. v.

Flegles, Inc., 419 F.3d 584, 593 (7th Cir 2005). The award

of attorney’s fees is governed, in this case, by the Agreement, which states:

[T]he breaching party will indemnify and hold the

non-breaching party harmless for any costs, damages

or expenses, including reasonable attorney’s fees,

arising out of the breach of the Agreement by that

party, or arising out of any suit or claim to enforce the

Agreement. The parties agree that in the event that

one of the Parties hereto commences a lawsuit or

other legal proceeding alleging that the other Party

breached the Agreement, the prevailing Party in that

action shall be entitled to recover her or its reasonable attorneys fees and expenses incurred in such

lawsuit or legal proceeding from the non-prevailing

Party.

The judge held that Matthews filed suit and lost when

the jury found WEC did not breach the Agreement, and

WEC was therefore entitled to reasonable attorney’s fees

under the Agreement. Matthews attacks the judge’s

award of attorney’s fees on several levels.

Matthews first argues that the judge erred in granting

WEC’s motion for attorney’s fees because the request
Nos. 10-2600 & 10-3571 13

lacked any description of the work performed. Matthews,

however, ignores the fact that this is a contractual feeshifting case, not a statutory fee-shifting case. In Medcom

Holding Co. v. Baxter Travenol Labs., Inc., 200 F.3d 518, 520

(7th Cir. 1999), we held that fee-shifting contracts

require “reimbursement for commercially-reasonable

fees no matter how the bills are stated.” Thus, the standard in a contractual fee-shifting case is a “commercially

reasonable” standard, Balcor Real Estate Holdings, Inc. v.

Walentas-Phoenix Corp., 73 F.3d 150, 153 (7th Cir. 1996),

and does not require courts to engage in “detailed, hourby-hour review” of a prevailing party’s billing records,

Medcom, 200 F.3d at 521.

Matthews next argues that the fees are not commercially reasonable. In determining whether they are,

a court will look to the aggregate costs in light of the

stakes of the case and opposing party’s litigation strategy. Id. Concerning the “stakes” in the suit, and Matthews’

“litigation strategy,” it is interesting to note that WEC’s

lawyer told us at oral argument, without contradiction

from Matthews, that her final settlement demand was

$500,000. That makes spending the kind of money WEC

did to defend the case look a bit more reasonable. Had a

more modest sum been the goal, the defense spending

might also have been considerably less.

A willingness to pay is an indication of commercial

reasonableness. Balcor, 73 F.3d at 153. Here, the district

court correctly applied the commercial reasonableness

standard to the facts of the case and found the fees reasonable. While the total attorney’s fees in this case
14 Nos. 10-2600 & 10-3571

The judge also noted that the language of the Agreement

4

allows the prevailing party to recover even for unsuccessful

(continued...)

are unquestionably, and unfortunately, very high, WEC

presented evidence that it paid its legal fees before the

jury reached a verdict, unsure if it would ever recover

them. See Kallman v. Radioshack Corp., 315 F.3d 731, 742 (7th

Cir. 2002) (finding the prevailing party’s payment of

her legal bills to be “strong evidence of commercial reasonableness, which is all that is required” under a contractual indemnity clause). Matthews has offered no

evidence to counter WEC’s payment of the bills. Accordingly, WEC’s attorney’s fees are commercially reasonable.

Matthews also argues that the judge incorrectly

granted WEC fees for the second summary judgment

motion because they were not the prevailing party on that

motion. Under Wisconsin law, however, a “prevailing

party” is not required to win in “all respects.” Metavante

Corp. v. Emigrant Savings Bank, 2009 WL 4556121, at *3

(E.D.Wis. Nov. 27, 2009), aff’d, 619 F.3d 748 (7th Cir. 2010).

“Where a party’s claims ‘arise out of a common core of

facts,’ a ‘losing party is not entitled to a reduction in

attorney’s fees for time spent on unsuccessful claims, if

the winning party achieved substantial success and the

unsuccessful claims were brought and pursued in good

faith.’ ” Id. Matthews does not argue that WEC brought

the second motion for summary judgment in bad faith.

Thus, as the judge noted, Metavante completely dismantles

Matthews’ argument with respect to motions on which

WEC was unsuccessful. WEC prevailed in the action, 4
Nos. 10-2600 & 10-3571 15

(...continued) 4

motions. We agree. Under the Agreement, the “prevailing

Party in that action shall be entitled to . . . fees and expenses

incurred in such lawsuit.” Thus, the provision applies to

all claims in the action and allows recovery on all fees

and expenses in the lawsuit, regardless of the outcome of

individual claims.

and under the Agreement it is accordingly entitled

to reasonable attorney’s fees and costs.

Finally, Matthews argues that the award of attorney’s

fees was inequitable because she made a good faith

claim, and she cannot afford to pay the fees. But, as the

district judge noted, the fee-shifting provision of the

Agreement does not provide an exception for financial

hardship or good faith. Unless the provision is the

product of unequal bargaining power, courts generally

will not dispute the fairness of such provisions. Berthold

Types Ltd. v. Adobe Systems, Inc., 186 F. Supp. 2d 834, 837

(N.D.Ill. 2002) (citing Medcom, 200 F.3d at 520; Balcor, 73

F.3d at 153); see, e.g., United States, for the use of C.J.C., Inc. v.

Western States Mechanical Contractors, Inc., 834 F.2d 1533,

1548 (10th Cir. 1987) (“[W]here contracting parties have

agreed that a breaching party will be liable for attorneys’ fees, the purpose of the award is to give the parties

the benefit of that bargain, and the court’s responsibility

is to enforce that bargain”). This is not a case in which

one party had unequal bargaining power, and no

equitable requirement applies to the attorney’s fee under

the Agreement. Therefore, the district judge correctly

found that Matthews’ final claim also fails.
16 Nos. 10-2600 & 10-3571

A moment ago, we noted that the fees here are “unquestionably, and unfortunately, very high.” What else can

one say about a staggering figure like $563,021.39 in a case

like this? But whether even a portion of those fees are

collectable is not a matter about which we can be concerned.

For these reasons, the judgment of the district court

is AFFIRMED.

6-1-11