Court Opinion

ID: 9705435
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:06:12.191993+00
Date Added: 2024-06-11T18:22:11.252452
License: Public Domain

JON P. WILCOX, J.
¶ 15. (dissenting). The Wisconsin Consumer Act (WCA) was enacted to more *38equally balance consumer-creditor interests in consumer transactions.1 The purposes of the WCA, set forth in Wis. Stat. § 421.102(2), are: "To simplify, clarify and modernize the law governing consumer transactions"; "To protect customers against unfair, deceptive, false, misleading and unconscionable practices by merchants"; and "To permit and encourage the development of fair and economically sound consumer practices in consumer transactions." § 421.102(2)(a)-(c). While the WCA is to be liberally construed to promote its underlying purposes and policies, the, majority's opinion today has tipped the balance. Therefore, I respectfully dissent.
¶ 16. "The basic purpose of the remedies set forth in Chapter 425, Stats., is to induce compliance with the WCA and thereby promote its underlying objects." First Wisconsin Nat'l Bank v. Nicolaou, 113 Wis. 2d 524, 533, 335 N.W.2d 390 (1983). One such remedy is the fee-shifting statute, Wis. Stat. § 425.308. Section 425.308 provides in part:
Reasonable attorney fees. (1) If the customer prevails in an action arising from a consumer transaction, the customer shall recover the aggregate amount of costs and expenses. . .together with a reasonable amount for attorney fees.
¶ 17. The issue in this case is whether the seven customers prevailed under the WCA, and are therefore entitled to recover the attorney's fees and expenses incurred in bringing their motions to reopen. In order to prevail under Wis. Stat. § 425.308, the customer (1) must be the "prevailing party," i.e., he or she must have *39succeeded on a significant issue in litigation, and (2) the benefit must involve the creditor's violation of the WCA. Footville State Bank v. Harvell, 146 Wis. 2d 524, 530, 539-40, 432 N.W.2d 122 (Ct. App. 1988).
¶ 18. I agree with the dissent in the court of appeals in this case that the reopening and dismissal without prejudice of these matters do not constitute a "significant benefit" to the customers. "[T]he reopening of the matters and their dismissal merely required the creditors to recommence these actions in the proper county. At best, any negative effects which were halted were halted temporarily." Community Credit Plan, Inc. v. Johnson, 221 Wis. 2d 766, 777-78, 586 N.W.2d 77 (Ct. App. 1998)(Curley, J., dissenting). Thus, I would hold that the customers did not achieve a significant benefit in this litigation.2 See id. at 774.
¶ 19. I also disagree with the application of the catalyst test, the test for determining prevailing party status for attorney's fees under 42 U.S.C. § 1988, to actions which fall under the WCA. See Community Credit Plan, 221 Wis. 2d at 775-76. This court has never sanctioned the application of the catalyst test to a fee request under the WCA,3 and has not adequately explained its reasons for doing so now. I believe the *40majority, by sanctioning use of the catalyst test under the WCA, has unnecessarily and incorrectly extended the right of a customer to receive attorney's fees for virtually any outcome which "favors" the customer — not just mistakes in venue.
¶ 20. An award of attorney's fees under Wis. Stat. § 425.308 is further limited to those cases in which the creditor violated a provision in the WCA. River Bank of DeSoto v. Fisher, 206 Wis. 2d 63, 66-67, 556 N.W.2d 324 (1996); Nicolaou, 113 Wis. 2d at 536. The creditor bears the responsibility to avoid mistakes of law and resulting WCA violations. Nicolaou, 113 Wis. 2d at 534.
¶ 21. The majority has held that "[t]he Creditor's prosecution of these seven actions in the Milwaukee County Circuit Court was a violation of the venue provision of the WCA." Community Credit Plan, 221 Wis. 2d at 775 (emphasis added). Venue for a claim arising out of a consumer credit transaction is the county:
(a) Where the customer resides or is personally served;
(b) Where the collateral securing a consumer credit transaction is located; or
(c) Where the customer sought or acquired the property, services, money or credit which is the subject of the transaction or signed the document evidencing his or her obligation under the terms of the transaction.
Wis. Stat. § 421.401(1). Section 421.401(2) provides:
(2) When it appears from the return of service of the summons or otherwise that the county in which the action is pending under sub. (1) is not a proper place of trial for such action, unless the defendant *41appears and waives the improper venue, the court shall act as follows:
(a) Except as provided in par. (b), if it appears that another county would be a proper place of trial, the court shall transfer the action to that county.
(b) If the action arises out of a consumer credit transaction, the court shall dismiss the action for lack of jurisdiction. [Emphasis added.]
¶ 22. I am persuaded by the dissent's position that the legislative scheme requires affirmative action by the court on venue issues. Johnson, 221 Wis. 2d 766, 779 (Curley, J. dissenting). The language of the statute supports this conclusion.
¶ 23. First, the use of the word "shall" indicates that the court's action to determine venue and either transfer the case or dismiss the case, if necessary, is mandatory. Nicolaou, 113 Wis. 2d at 536; Wis. Stat. § 421.401(2)(a) and (b). "Had the trial court followed the legislative scheme, it [w]ould have dismissed these actions rather than granting default judgments. It is the trial court, not the creditors, who are charged with reviewing the case for improper venue." Community Credit Plan, 221 Wis. 2d at 779 (Curley, J., dissenting). To place the burden of determining proper venue solely on the creditor without acknowledging any court responsibility renders this language directing the court to act superfluous. We do not construe statutes so as to render a word or clause superfluous. Footville State Bank, 146 Wis. 2d at 536.
¶ 24. Second, the statement "when it appears from the return of service"4 that the county is not the *42proper place for trial suggests to me that at some point after the summons and complaint have befen filed, the case will be reviewed for a determination of venue. In contrast, the majority concludes that the prosecution or commencement of the action in the wrong county, irrespective of judicial review, constitutes a violation of the WCA. The creditor loses before he or she has even started.
¶ 25. Moreover, the majority's decision is far too broad — the prosecution of a case in the wrong county constitutes a violation of Wis. Stat. § 421.401. Community Credit Plan, 221 Wis. 2d at 775. Under this holding, attorney's fees can be assessed in a consumer transaction under § 421.401(2)(a)(where the defect is remedied by transferring to the proper county) as well as consumer credit transactions under § 421.401(2)(b)(where the case must be dismissed). The ultimate remedy does not determine a violation; according to the majority, the commencement of an action in the wrong county constitutes a violation of the venue provision.
¶ 26. "Given the fluid nature of the statute, a county which was an appropriate county when the action was commenced may become inappropriate by the time of service. . . .Further, a high percentage of these small claims actions are brought and litigated by non-lawyers who often are unable to easily determine what constitutes proper venue." Community Credit Plan, 221 Wis. 2d at 778-79 (Curley, J., dissenting). I *43believe the majority has unfairly created a trap in which unsophisticated creditors may easily step. Consumer credit transactions are not every creditors' "bread and butter."
¶ 27. Admittedly, the WCA was enacted, in part, to protect customers "against unfair, deceptive, false, misleading and unconscionable practices by merchants." Wis. Stat. § 421.102(2)(b). However, there has been no finding by the circuit court that Community Credit's action was unconscionable, unfair, deceptive or misleading. Without evidence to support a finding of unfair practices by a creditor, I do not believe a mistake in venue should constitute a violation of the WCA. Nor does an award of attorney's fees without evidence of abuse by a creditor further the purposes of the WCA.
¶ 28. It is undisputed that the customers defaulted on their payments. In their motions to reopen, the customers did not even raise a defense to the claim of default. It would seem that the venue question is being pursued to simply collect attorney's fees, not defend the customers' defaults. The majority not only sanctions such suits, its decision encourages them.
¶ 29. For the above-stated reasons, I respectfully dissent.

 Jeffrey Davis, Legislative Restriction of Creditor Powers and Remedies: A Case Study of the Negotiation and Drafting of the Wisconsin Consumer Act, 72 Mich. L. Rev. 3, 6 (1973).

 I also believe that the court of appeals, and consequently the majority in this case, incorrectly relied on facts not supported by the record. The record does not contain the customers credit records (which could have been marred) nor would the replevin judgments allow for the garnishment of the customers' wages, only possession of the property. Wis. Stat. § 425.205(1)(e).

 My research has not revealed any federal authority applying the catalyst test to actions brought under the federal consumer credit protection act, which provides a basis for interpreting the WCA. See Wis. Stat. § 421.102(2)(d).

 "Written proof of service is required to the end that jurisdiction appear of record. This may be supplied by written admission of the defendant, by certificate of the sheriff or dep*42uty if that officer makes the service, otherwise by affidavit of any other person making the service. But it is the fact of service, not its proof, which gives the court jurisdiction." 2 Callaghan's WlS. Pl & Pr § 14.44 (4th ed. 1996). A defective return may be amended even after judgment to supply omissions. Id. at §§ 14.44 and 14.70.