Opinion ID: 1617528
Heading Depth: 1
Heading Rank: 4

Heading: did the trial court err in granting the fehrings' motion for attorney fees?

Text: The trial judge in this case granted the Fehrings attorney fees in the amount of $23,252.53. The judge observed, in a memorandum decision, that Republic's intentional conduct of refusing to pay the Fehrings adequate compensation under the policy forced the Fehrings to expend attorney fees. Therefore, the court concluded that attorney fees are the direct and foreseeable result of the bad faith and are used by the insurer as leverage to increase the effectiveness of its bad faith actions to defend the insured. We reach a contrary conclusion. In Baker v. Northwestern Nat. Casualty Co., 26 Wis. 2d 306, 132 N.W.2d 493 (1965), this court considered the issue of whether or not the insured party could recover reasonable attorney fees in an overage action against the insurer. The Baker court noted that Wisconsin law generally does not allow recovery of attorney fees unless authorized by statute or contract, except when the fees are the natural and proximate result of a wrongful act by the defendant which has involved the plaintiff in litigation with other parties. Id. at 318. See also, Kohlenberg v. American Plumbing Supply Co., 82 Wis. 2d 384, 399, 263 N.W.2d 496 (1978). The Baker opinion employed the following analysis concerning the insured's attempt to recover fees from the insurer based upon the jury's finding of bad faith on the part of the insured: `For the expense incurred in the present litigation, we have found that our law generally gives the successful party no recompense beyond the taxable costs which ordinarily include only a portion of his expense. This is the case, however wrongful the suit or groundless the defense. On the other hand, where the present defendant has by his wrongful conduct, be it tort or breach of contract, caused the present plaintiff to defend or prosecute previous legal proceedings, the law reverses its restrictive attitude and allows the plaintiff to recover all the expense, including counsel fees, reasonably incurred by him in the prior litigation.' Baker v. Northwestern Nat. Casualty Co., 26 Wis. 2d at 319-20, citing McCormick, Damages (hornbook series), sec. 66 at 246. (Emphasis supplied.) The court concluded that the insured could not recover attorney fees from the insured. [6] We reach a similar conclusion. The instant case is not one where Republic's conduct has caused the Fehrings to defend or prosecute previous legal proceedings; therefore, the award of attorney fees is reversed. [7] In conclusion, we hold that under the facts of this case, there was sufficient evidence to support a finding that Republic's actions surrounding its treatment of the Fehrings' claim constituted bad faith. We also hold that attorney fees are not recoverable in bad-faith actions by the insured against the insurer and that a new trial on the issue of punitive damages is unwarranted in this case. By the Court. The decision of the court of appeals is reversed; the judgment of the circuit court is affirmed in part, reversed in part, and the cause remanded to the circuit court for entry of judgment consistent with this opinion.