2011 WI App 11
court of appeals of
published opinion
Case No.: |
2010AP276 |
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Complete Title of Case: |
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Ziolkowski Patent Solutions Group, S.C.,
Plaintiff-Appellant, v. Great Lakes Dart Manufacturing, Inc.,
Defendant-Respondent. |
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Opinion Filed: |
December 22, 2010 |
Submitted on Briefs: |
September 30, 2010 |
Oral Argument: |
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JUDGES: |
Brown, C.J., Neubauer, P.J., and Reilly, J. |
Concurred: |
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Dissented: |
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Appellant |
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ATTORNEYS: |
On behalf of the plaintiff-appellant, the cause was
submitted on the briefs of Joseph R. Cincotta of Law Offices of Joseph R. Cincotta, |
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Respondent |
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ATTORNEYS: |
On behalf of the defendant-respondent, the cause was
submitted on the brief of Christopher T. Kolb of |
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2011 WI App 11
COURT OF APPEALS DECISION DATED AND FILED December 22, 2010 A.
John Voelker Acting Clerk of Court of Appeals |
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NOTICE |
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This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
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Appeal No. |
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STATE OF |
IN COURT OF APPEALS |
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Ziolkowski Patent Solutions Group, S.C.,
Plaintiff-Appellant, v. Great Lakes Dart Manufacturing, Inc.,
Defendant-Respondent. |
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APPEAL
from a judgment of the circuit court for
Before Brown, C.J., Neubauer, P.J., and Reilly, J.
¶1 REILLY, J. Ziolkowski
Patent Solutions Group (Ziolkowski), a
¶2 We also reverse the circuit court’s decision to award costs to GLD pursuant to Wis. Stat. § 807.01(1) (2007-08),[1] as the judgment of the court was higher than GLD’s written statutory offer.
BACKGROUND
¶3 In 2004, GLD hired Ziolkowski to prosecute and draft patent applications. An engagement letter sent by Ziolkowski and signed and returned by GLD set forth the contractual terms of the relationship. The engagement letter did not include any provision for interest charges on late payments.
¶4 GLD took its intellectual property work to a different law firm in 2006. Ziolkowski sued GLD for unpaid legal fees and sought 18% interest on the unpaid bills. Ziolkowski justified its request for 18% interest by pointing to a clause at the bottom of the invoices that stated “[a] finance charge of 1.5% per month will be assessed on all accounts past due 30 days.”
¶5 On September 3, 2009, the circuit court issued a written decision and order granting summary judgment to Ziolkowski for the unpaid legal fees of $45,656.41, but denying Ziolkowski’s claim for 18% interest on the unpaid fees. The circuit court found that the parties did not agree to any interest charges when they entered into their contract. The circuit court made no mention of an award for 5% interest per Wis. Stat. § 138.04.[2] The court did not direct which party was to draft the documents perfecting the court’s order into a judgment, and neither party did so.
¶6 Over a month later, GLD served Ziolkowski with a “statutory offer of judgment” pursuant to Wis. Stat. § 807.01(1).[3] GLD’s statutory judgment offer was for: “(1) the principal sum of $45,656.41; plus (2) $8,596.04 in interest, computed as 5% annual simple interest rate on each of the invoiced amounts shown in the attached spreadsheet, from the date of each invoice to the date hereof; plus (3) 5% annual simple interest on the total amount of $7.43, from the date hereof until the date of acceptance of this offer; plus (4) costs.” GLD acknowledges that its statutory offer should have included the words “per diem” after “$7.43.”
¶7 Pursuant to an earlier scheduling order, a final pretrial conference was held on October 23, 2009. GLD appeared at the conference, but Ziolkowski did not.[4] The circuit court commenced the final pretrial conference with the comment, “We’re just trying to figure out why we’re here today.” GLD’s attorney concurred, saying “I am too.” GLD’s attorney indicated to the court that he had spoken to Ziolkowski’s attorney and offered to pay the $45,656.41 in three monthly installments, but Ziolkowski refused the offer. GLD informed the court that it then offered Ziolkowski 5% interest on the unpaid bills but Ziolkowski refused. GLD’s attorney told the court that it was debatable whether it owed any interest on the unpaid bills, but that GLD included 5% interest in the statutory offer because it wanted the matter resolved.
¶8 The circuit court found GLD’s statutory offer of judgment to
be appropriate and ruled that the court would enter judgment against GLD “in
the amount as in your statutory offer of judgment.” GLD requested that the circuit court deny
costs to Ziolkowski and award costs to GLD because the deadline for Ziolkowski
to respond to the statutory offer of judgment had expired and the court’s
judgment was presumably the same amount as the statutory offer. The court agreed and instructed GLD to put
the issue of costs into its order for judgment.
¶9 GLD drafted and submitted a proposed judgment to the circuit
court. Ziolkowski objected to the
proposed judgment on the grounds that it awarded 5% interest instead of
18%. Additionally, Ziolkowski objected
to the proposed award of costs to GLD, as the proposed judgment was more than
GLD’s statutory offer of judgment as written.
¶10 On November 6, 2009, the circuit court entered a judgment
against GLD for: “(i) $45,656.41 for
unpaid bills, plus (ii) 5% annual simple interest on the bills which comprise
that amount, from the dates thereof to October 12, 2009, which interest comes
to $8,596.04, plus (iii) further 5% interest, in the amount of $7.43 per day on
the combined amount of $54,252.45, from October 12, 2009 to the date of entry
of judgment.” The court denied costs to
Ziolkowski and awarded costs to GLD pursuant to Wis. Stat. § 807.01(1).
¶11 Ziolkowski raises two issues on appeal. It first argues that it is entitled to 18% interest on the unpaid legal bills rather than 5% interest because of the clause at the bottom of its invoices. Second, Ziolkowski argues that GLD is not entitled to recover costs because the circuit court’s judgment was more favorable than GLD’s statutory offer.
DISCUSSION
Interest Rate
¶12 Ziolkowski argues that it is entitled to 18% yearly interest on
the unpaid legal bills as each of its invoices to GLD contained a clause
stating that “[a] finance charge of 1.5% per month will be assessed on all
accounts past due 30 days.” GLD counters
that Ziolkowski is not entitled to 18% interest as the signed engagement letter
contained no provision for interest charges on late payments. This issue requires us to interpret
Ziolkowski’s engagement letter. The
interpretation of a contract is a question of law subject to de novo
review. See DeWitt Ross & Stevens,
S.C. v. Galaxy Gaming and Racing Ltd., 2004 WI 92, ¶20, 273
¶13 Attorneys have a burden to clearly draft their legal fee
agreements. Gorton v. Hostak,
¶14 Ziolkowski argues that Mid-State Contracting, Inc. v. Superior
Floor Co., 2002 WI App 257, 258
¶15 This court agreed with Mid-State, and awarded it 18%
interest.
¶16
GLD’s Statutory Offer
¶17 GLD filed a statutory offer of judgment pursuant to Wis. Stat. § 807.01(1), over a
month after the circuit court’s decision and order. GLD’s statutory judgment
offer was for: “(1) the principal sum of
$45,656.41; plus (2) $8,596.04 in interest, computed as 5% annual simple
interest rate on each of the invoiced amounts shown in the attached
spreadsheet, from the date of each invoice to the date hereof; plus (3) 5%
annual simple interest on the total amount of $7.43, from the date hereof until
the date of acceptance of this offer; plus (4) costs.” The circuit court subsequently entered a
judgment for: “(i) $45,656.41 for unpaid
bills, plus (ii) 5% annual simple interest on the bills which comprise that
amount, from the dates thereof to October 12, 2009, which interest comes to
$8,596.04, plus (iii) further 5% interest, in the amount of $7.43 per day on
the combined amount of $54,252.45, from October 12, 2009 to the date of entry
of judgment.” GLD was awarded costs
pursuant to § 807.01(1), while Ziolkowski was denied costs.
¶18 The interpretation of a settlement offer under Wis. Stat. § 807.01(1) presents a
question of law subject to de novo review.
See DeWitt Ross & Stevens,
273
¶19 Section three of GLD’s offer was for “5% annual simple interest
on the total amount of $7.43, from
the date hereof until the date of acceptance of this offer.” (Emphasis added.) GLD admits that it forgot to include the
words “per diem” after “$7.43.” This
court has noted that it is the obligation of the party making the offer to do
so in clear and unambiguous terms. See Stan’s Lumber, Inc. v. Fleming, 196
¶20
CONCLUSION
¶21 We affirm the circuit court’s judgment denying Ziolkowski 18% interest on its unpaid legal bills. We reverse the circuit court’s award of costs to GLD as the circuit court’s judgment exceeded GLD’s statutory offer. Left undetermined is whether the circuit court’s award of 5% interest was appropriate. From the record, it is obvious that GLD has no issue with the 5% statutory interest; after Ziolkowski did not accept GLD’s offer of judgment, GLD told the court that it would accept judgment against it with 5% interest. Although Ziolkowski continued to request 18% interest, that request was previously denied on summary judgment. Ziolkowski does not object to the award of 5% interest pursuant to Wis. Stat. § 138.04 on appeal. Therefore, in addition to affirming the circuit court’s denial of the 18% interest claim, we also affirm its judgment of 5% statutory interest on the unpaid amount of legal bills.
By the Court.—Judgment affirmed in part; reversed in part and cause remanded with directions.
[1] All references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.
[2] Five percent is the statutory annual interest rate set forth in Wis. Stat. § 138.04.
[3] Wisconsin Stat. § 807.01(1) provides that:
(1) After issue is joined but at least 20 days before the trial, the defendant may serve upon the plaintiff a written offer to allow judgment to be taken against the defendant for the sum, or property, or to the effect therein specified, with costs. If the plaintiff accepts the offer and serves notice thereof in writing, before trial and within 10 days after receipt of the offer, the plaintiff may file the offer, with proof of service of the notice of acceptance, and the clerk must thereupon enter judgment accordingly. If notice of acceptance is not given, the offer cannot be given as evidence nor mentioned on the trial. If the offer of judgment is not accepted and the plaintiff fails to recover a more favorable judgment, the plaintiff shall not recover costs but defendant shall recover costs to be computed on the demand of the complaint.
[4] Ziolkowski’s attorney corresponded to the court that he thought the circuit court’s summary judgment order “essentially end[ed] the case.”
[5] Wis. Stat. § 402.207(2) provides that:
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(a) The offer expressly limits acceptance to the terms of the offer;
(b) They materially alter it; or
(c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received.