By Joseph R. Johnson, Associate Attorney
As Attorney Jason Hermersmann discussed in his July 29, 2011 blog article, Wisconsin’s small claim jurisdictional limit was increased from $5,000 to $10,000 as of July 1, 2011. This increase was accomplished though the amendment of Wis. Stat. §799.01(1)(d), which sets Wisconsin’s jurisdictional limit for small claims actions. However, Wis. Stat. § 814.04(1), which governs statutory attorney fees, was not adjusted to reflect this increase in the small claims jurisdictional limit. This effectively lowers the recoverable attorney fees available to a prevailing party when between $5,000 and $10,000 is recovered.
The relevant portion of Wis. Stat. § 814.04(1)(a) states:
(1) Attorney Fees. (a) When the amount recovered or the value of property is greater than the maximum amount specified in s. 799.01(1)(d), attorney fees shall be $500; when it is equal to or less than the maximum amount specified in s. 799.01(1)(d), but is $1,000 or more, attorney fees shall be $300; when it is less than $1,000, attorney fees shall be $100…
(6) Judgment by Default. If the judgment is by default…the costs taxed under sub. (1) shall be one-half what they would have been had the matter been contested.
The statute does not reference the specific amount of the small claims jurisdictional limit, instead it references the amount specified in Wis. Stat. § 799.01(1)(d). This is important to note as it makes the statute governing all recoverable attorney fees a function of the small claims jurisdictional limit, whatever that may be. Therefore, prior to July 1, 2011, judgments taken in large claims where more than $5,000 but less than $10,000 was recovered, the recoverable attorney fees were $500 for contested actions and $250 for default judgments. However, with the increase in the small claims jurisdictional limit, judgments taken after July 1, 2011 in small claims for the exact same amounts, recoverable attorney fees are only $300 for contested actions and $150 for default judgments. While this reduction in recoverable attorney fees is unfortunate for plaintiffs, it is balanced by the reduced costs and complexity of a small claims action.
However, from a plain reading of Wis. Stat. § 814.04(1), large claim cases seeking less than $10,000 filed prior to July 1, 2011 but where judgment is not rendered until after July 1, 2011 are also subject to lower recoverable attorney fees. For example, a case filed on June 15, 2011, in which the plaintiff is seeking to recover $7,000 would have been classified as a large claims case. If judgment is obtained at trial for $7,000 on October 1, 2011 the recoverable attorney fees would only be $300 as opposed to $500, as $7,000 is no longer greater than the maximum amount specified in Wis. Stat. §799.01(1)(d). This is a result of Wis. Stat. §814.04(1) being completely dependent on the small claims jurisdictional limit to set its parameters. It is an unfortunate outcome as while the plaintiff had to pay the higher large claim filing fee, and be subject to the more stringent rules governing a large claims action, the plaintiff is no longer entitled to the higher attorney fee upon judgment.
In sum, until all cases filed before July 1, 2011 are resolved, plaintiffs and their attorneys should be aware of the interaction between Wis. Stats §§ 799.01(1)(d)and 814.04(1) to insure that the correct attorney fee is being requested when judgment is entered.