Randy L. Betz v. Diamond Jim's Auto Sales

2014 WI 66

SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP183
COMPLETE TITLE: Randy L. Betz,
Plaintiff-Appellant,
v.
Diamond Jim's Auto Sales,
Defendant-Respondent-Petitioner.

REVIEW OF A DECISION OF THE COURT OF APPEALS
Reported at 344 Wis. 2d 681, 825 N.W.2d 508
(Ct. App. 2012 – Published)
PDC No.: 2012 WI App 131

OPINION FILED: July 15, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: January 9, 2014

SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Milwaukee
JUDGE: Maxine A. White

JUSTICES:
CONCURRED:
DISSENTED: ABRAHAMSON, C.J., dissents. (Opinion filed.)
NOT PARTICIPATING: ROGGENSACK, J., did not participate.

ATTORNEYS:
For the defendant-respondent-petitioner, there were briefs
by Lawrence J. Drabot, Sara C. Mills, and Crivello Carlson,
S.C., Milwaukee, and oral argument by Lawrence J. Drabot.

For the plaintiff-appellant, there was a brief by Timothy
J. Aiken, Vincent P. Megna, Susan M. Grzeskowiak, and Aiken &
Scoptur, S.C., Milwaukee, and oral argument by Susan Grzeskowiak
and Timothy J. Aiken.
 2014 WI 66
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2012AP183
(L.C. No. 2010CV2883)

STATE OF WISCONSIN : IN SUPREME COURT

Randy L. Betz,

Plaintiff-Appellant, FILED
v. JUL 15, 2014
Diamond Jim's Auto Sales, Diane M. Fremgen
Clerk of Supreme Court
Defendant-Respondent-Petitioner.

REVIEW of a decision of the Court of Appeals. Reversed.

¶1 ANNETTE KINGSLAND ZIEGLER, J. This is a review of a

decision of the court of appeals, Betz v. Diamond Jim's Auto

Sales, 2012 WI App 131, 344 Wis. 2d 681, 825 N.W.2d 508,
reversing an order of the Milwaukee County Circuit Court1 denying

a motion by the attorneys representing Randy L. Betz ("Betz") to

recover statutory attorney's fees from Diamond Jim's Auto Sales

("Diamond Jim's").

¶2 In this case we are asked to determine the

circumstances under which plaintiff's counsel may recover

1
The Honorable Maxine A. White presided.
 No. 2012AP183

statutory attorney's fees directly from a defendant when,

without counsel's knowledge or approval, the plaintiff and

defendant enter into a settlement agreement that does not

address attorney's fees.

¶3 Betz hired Milwaukee attorney Vincent Megna ("Megna")

to represent him in his dispute with Diamond Jim's.2 Megna filed

a lawsuit on Betz's behalf under two fee-shifting statutes.

During the litigation, Betz and Diamond Jim's met and settled

the case without their attorneys' knowledge or approval. The

settlement agreement did not reference payment of Megna's

statutory attorney's fees. Subsequently, Megna filed a motion

with the circuit court seeking to recover his statutory fees

from Diamond Jim's. The circuit court denied Megna's motion.

The court of appeals reversed, citing public policy concerns

with enforcing settlements made "behind the backs" of the

attorneys in cases brought under fee-shifting statutes.

¶4 Diamond Jim's argues that the right to recover

statutory attorney's fees belonged to Betz, and that Betz did
not assign his right to recover those fees to Megna. As a

result, Diamond Jim's argues that Megna cannot recover fees

directly from Diamond Jim's. Further, Diamond Jim's argues that

public policy encourages parties to settle disputes and

2
Several attorneys with the law firm of Aiken & Scoptur,
S.C., including Megna, worked on Betz's case. All these
attorneys seek to recover statutory attorney's fees from Diamond
Jim's. For the sake of simplicity, this opinion will refer only
to Megna.

2
 No. 2012AP183

requiring counsel's consent to such settlements in fee-shifting

cases presents a conflict of interest.

¶5 Megna argues that Betz did assign his statutory right

to recover attorney's fees, and that the public policy

underlying fee-shifting statutes would be undermined if clients

were allowed to settle fee-shifting cases without ensuring

payment of statutory attorney's fees. Megna further asserts

that attorney involvement and consent to settlement agreements

in fee-shifting cases will not serve as a barrier to settlement.

¶6 We conclude that the statutory right to recover

attorney's fees belonged to Betz, and that Betz did not assign

his right to recover those fees to Megna in their fee agreement.

Because we conclude that Betz did not assign his right to

recover statutory attorney's fees to Megna, we must conclude

that Diamond Jim's could not have had notice of the assignment.

As a result, we conclude that Megna may not seek statutory

attorney's fees directly from Diamond Jim's, and that the

settlement agreement entered into between Diamond Jim's and Betz
is clear, unambiguous, and enforceable. We therefore reverse

the court of appeals.

I. FACTUAL BACKGROUND

¶7 On October 19, 2009, Betz purchased a 1999 Cadillac

Escalade from Diamond Jim's. Betz paid $8,705.98 for the

vehicle, including sales tax, title, and license fee. Over the

following months, Betz experienced problems with the vehicle,

which Diamond Jim's was unable to address to Betz's
satisfaction.
3
 No. 2012AP183

¶8 On February 12, 2010, Betz hired Megna to represent

him in his dispute with Diamond Jim's. The terms of the fee

agreement3 between Betz and Megna provided, in relevant part:

I understand that I do not have to pay any attorney
fees unless my attorneys recover money for me in this
case.

FEE SHIFTING

I understand that Sec. 100.18, Wis. Stats., __________
is a fee[-]shifting statute. This means if I win at
trial or settle my case during litigation, the
defendant is usually responsible for paying my
attorney fees based on my attorney's hourly rate. I
understand that the Law Offices of Vince Megna is
accepting my case with the agreement that it will look
to the defendant for payment of attorney fees pursuant
to the fee[-]shifting provision once a lawsuit has
been filed.

. . . .

SETTLEMENT PRIOR TO LAWSUIT

If a settlement is reached prior to a lawsuit being
filed in my case, I understand that the defendant may
not be responsible for payment of my attorney fees.
In this event, the Law Offices of Vince Megna agrees
to charge a flat rate attorney fee in the amount of
______.

COSTS AND EXPENSES

I understand that the Law Offices of Vince Megna will
need to pay costs and expenses. In the event my case
is lost through no fault of my own, I understand that
the Law Offices [of] Vince Megna will not bring a
claim against me for these costs and expenses.

3
The fee agreement referenced "The Law Offices of Vince
Megna" rather than Megna's firm, Aiken & Scoptur. The parties
have not addressed the impact, if any, of this distinction, and
we therefore ignore it for purposes of this opinion.

4
 No. 2012AP183

I understand that if I do not accept a settlement that
my attorneys deem reasonable and my case continues
without settlement, I will be required to immediately
reimburse the Law Offices of Vince Megna for all costs
and expenses paid up until that point and then be
responsible to pay all further costs and expenses as
same become due.

TERMINATION

I understand that my attorney has the right to
"terminate" me as a client. The Law Offices of Vince
Megna will be entitled to fees for the work done at
its hourly rate and its costs, not to exceed 33 1/3%
of my gross recovery.

I understand that I have a right to terminate my
attorneys. However, if I do so, I will be responsible
for the Law Offices of Vince Megna fees and costs due
on the date of termination, not to exceed 33 1/3% of
my gross recovery.

(bolding omitted) (all blanks in original).
¶9 On March 1, 2010, Betz sued Diamond Jim's in Milwaukee

County Circuit Court. Betz asserted claims for false

advertising, contrary to Wis. Stat. § 100.18 (2009-10),4

intentional fraudulent misrepresentation and violations of

automobile dealership regulations, contrary to Wis. Stat.
§ 218.0116. In addition to compensatory and punitive damages,

Betz also claimed "actual attorney's fees" from Diamond Jim's

under fee-shifting statutes §§ 100.18(11)(b)2.5 and 218.0163(2).6

4
All subsequent references to the Wisconsin Statutes are to
the 2009-10 version unless otherwise indicated.
5
Wisconsin Stat. § 100.18(11)(b)2. provides, in relevant
part:

Any person suffering pecuniary loss because of a
violation of this section by any other person may sue
in any court of competent jurisdiction and shall
5
 No. 2012AP183

¶10 On May 17, 2010, Megna, on behalf of Betz, made a

settlement offer pursuant to Wis. Stat. § 807.01. The

settlement offer sought $10,750 in damages and $5,900 in

attorney's fees. The offer stated that the check for attorney's

fees should be made payable to Megna's firm. Diamond Jim's

rejected this offer through counsel.

¶11 On September 28, 2010, counsel for Diamond Jim's made

a counter-offer to settle the case by repurchasing the vehicle

and paying $2,000 towards Betz's attorney's fees. Megna, on

behalf of Betz, rejected this offer.

¶12 On April 4, 2011, Betz and Thomas Letizia ("Letizia"),

the general manager of Diamond Jim's, met without counsel and

settled the case. The settlement agreement provided, in

relevant part:

The purpose of this Agreement is the Amicable
Resolution of the Action without the need for further
litigation, the relinquishment by each of the parties
of any claim or cause of action arising from or
relating to the issues in the Action, and the mutual
release of all liability.

Therefore, in consideration of the following mutual
promises and releases made by the Parties as well as
other good and valuable consideration, the Parties to

recover such pecuniary loss, together with costs,
including reasonable attorney fees, . . . .
6
Wisconsin Stat. § 218.0163(2) provides, in relevant part:

Any retail buyer, lessee or prospective lessee
suffering pecuniary loss because of a violation by a
licensee . . . may recover damages for the loss in any
court of competent jurisdiction together with costs,
including reasonable attorney fees.

6
 No. 2012AP183

this Agreement agree that this Agreement is entered
into as a compromise of disputed claims and does not
constitute of liability [sic] or obligation whatsoever
on behalf of any of the parties pursuant to the
respective claims.

The parties agree to solve the action [sic] pursuant
to the following specified terms:

A) James Letizia and Diamond Jim's Auto Sales
agree to Pay to Randy L. Betz the sum of
[$15,000] paid in form of check number 7114;

B) Randy L. Betz hereby agrees that [his suit
against Diamond Jim's] [s]hall be dismissed.
¶13 On April 5, 2011, counsel for Diamond Jim's learned of

the settlement and drafted a letter advising Megna that the case

was resolved. The letter referenced the parties' "confidential

settlement" agreement and included a draft stipulation to

dismiss the case.

II. PROCEDURAL POSTURE

¶14 On April 21, 2011, Megna filed three motions with the

circuit court. First, Megna asked the circuit court to compel

Diamond Jim's to pay statutory attorney's fees pursuant to Wis.

Stat. § 100.18(11).7 Megna argued that the right to recover
attorney's fees under the statute belonged to the lawyer and not

the client, and that he and his firm were owed $16,808.50 at the

time of the settlement. Second, Megna requested leave to amend

the complaint and intervene as a plaintiff, arguing that he had

a cause of action against Diamond Jim's for intentional

7
While Betz's suit included claims under two different fee-
shifting statutes, Wis. Stat. §§ 100.18 and 218.0163, Megna's
motion referenced only § 100.18.

7
 No. 2012AP183

interference with a contractual relationship. Third, Megna

sought a court order compelling disclosure of the confidential

settlement between Betz and Diamond Jim's.

¶15 Diamond Jim's opposed Megna's motions. Diamond Jim's

argued that the statutory right to recover attorney's fees

belonged to Betz, and that the settlement agreement was a clear

and unambiguous contract between the parties and should be

enforced. Diamond Jim's asserted that the parties were entitled

to settle the case without counsel if they chose, and that while

Wis. Stat. § 100.18(11) allows for recovery of attorney's fees,

it does not mandate such a recovery in the event of a

settlement. Diamond Jim's also argued that the settlement

agreement should remain confidential unless the parties agreed

to disclose the terms.

¶16 On July 26, 2011, the court granted Megna's motion to

require disclosure of the confidential settlement agreement.

The court held all other motions in abeyance for 30 days to

allow the parties the opportunity to negotiate a settlement of
the attorney's fee issue. On August 31, 2011, the parties

disclosed to the court that they had failed to resolve the

dispute. The court then set a briefing schedule for the pending

motions.

¶17 On September 30, 2011, Diamond Jim's filed a motion

for reformation of the contract, or alternatively, for

rescission. The filing included an affidavit from Letizia

wherein he stated that when he signed the settlement agreement,
he believed it resolved the issue of statutory attorney's fees.
8
 No. 2012AP183

Diamond Jim's argued that if the settlement agreement did not,

in fact, resolve the fee issue, the agreement did not represent

a meeting of the minds and should be reformed or rescinded.

¶18 On December 8, 2011, the circuit court held a motion

hearing. The court determined that the statutory right to

recover attorney's fees belonged to Betz and not to his

attorneys. The court further concluded that the settlement

agreement was a clear, unambiguous, and binding contract between

Betz and Diamond Jim's. As a result, the court denied Megna's

motions and dismissed the case.8

¶19 On January 23, 2012, Megna appealed.9

¶20 On appeal, Megna argued that the fee-shifting statute

did not permit Betz to settle his claims without Megna's

knowledge or consent. Megna asserted that the right to collect

fees under the statute belonged to the attorney and not the

client, and that Diamond Jim's had a duty to refrain from

settling without Megna's knowledge or consent. Megna further

argued that the public policy underlying fee-shifting statutes
would be frustrated if clients were permitted to settle fee-

shifting cases without addressing statutory attorney's fees.

Finally, Megna argued that it would be inequitable to allow

8
Although the court stated in its December 8 order denying
Megna's motion that the order was final and appealable, it did
not enter an order dismissing the suit until January 9, 2012.
9
Megna's notice of appeal indicated that he was appealing
from the circuit court's December 8, 2011 order denying his
motions, rather than the January 9, 2012 order dismissing the
suit.

9
 No. 2012AP183

Diamond Jim's to avoid paying statutory attorney's fees in this

case.

¶21 Diamond Jim's argued that Betz had a right to settle

his claims and that right was not conditioned on his attorney's

knowledge or consent. Diamond Jim's asserted that the trial

court properly relied on contract principles in resolving the

issue, and that statutory attorney's fees cannot be awarded

under equitable principles. Diamond Jim's further argued that

Megna should be seeking attorney's fees from his client, Betz,

and not Diamond Jim's.

¶22 On October 16, 2012, the court of appeals reversed the

circuit court. Betz, 344 Wis. 2d 681, ¶1. The court of appeals

concluded that the settlement agreement, despite being clear and

unambiguous, was void because it was contrary to the public

policy behind fee-shifting statutes. Id., ¶13. The court of

appeals therefore ordered Betz to return the settlement payment

and remanded the case to the circuit court for continued

litigation. Id., ¶14.
¶23 Diamond Jim's petitioned this court for review, which

we granted on May 10, 2013.

III. STANDARD OF REVIEW

¶24 "The interpretation of an unambiguous contract

presents a question of law for this court's independent review."

Town Bank v. City Real Estate Dev., LLC, 2010 WI 134, ¶32, 330

Wis. 2d 340, 793 N.W.2d 476 (citing Admanco, Inc. v. 700 Stanton

Drive, LLC, 2010 WI 76, ¶15, 326 Wis. 2d 586, 786 N.W.2d 759).

10
 No. 2012AP183

¶25 "[T]he application of public policy considerations to

a contract" also presents a question of law that this court

reviews de novo. Northern States Power Co. v. Nat'l Gas Co.,

2000 WI App 30, ¶7, 232 Wis. 2d 541, 606 N.W.2d 613 (citing

Bowen v. Lumbermens Mut. Cas. Co., 183 Wis. 2d 627, 654, 517

N.W.2d 432 (1994)).

IV. ANALYSIS

¶26 "[A]n important purpose of fee-shifting statutes is to

encourage injured parties to enforce their statutory rights when

the cost of litigation, absent the fee-shifting provision, would

discourage them from doing so." Kolupar v. Wilde Pontiac

Cadillac, Inc., 2007 WI 98, ¶55, 303 Wis. 2d 258, 735 N.W.2d 93

(citing Shands v. Castrovinci, 115 Wis. 2d 352, 358, 340

N.W.2d 506 (1983)). Fee-shifting "encourage[s] attorneys to

take cases where the pecuniary loss is small in relation to the

cost of litigation." Cook v. Pub. Storage, Inc., 2008 WI App

155, ¶85, 314 Wis. 2d 426, 761 N.W.2d 645. "For the retail

buyer with a claim under [a fee-shifting statute], the cost of
the litigation may be significant, and even . . . exceed the

total recovery under the statute." Kolupar, 303 Wis. 2d 258,

¶37.

¶27 "The cumulative effect of minor transgressions is

considerable, yet they would not be deterred if fees were

unavailable." Fletcher v. City of Fort Wayne, Ind., 162

F.3d 975, 976 (7th Cir. 1998). "If the cost of litigation

reduces or even eliminates recovery, retail buyers will be less
likely to enforce their rights under the statute." Kolupar, 303
11
 No. 2012AP183

Wis. 2d 258, ¶37. Fee-shifting thus prevents "defendants from

inflicting with impunity small losses on the people whom they

wrong." Orth v. Wisconsin State Employees Union Council 24, 546

F.3d 868, 875 (7th Cir. 2008).

¶28 Fee-shifting statutes, and the attorneys who represent

clients in such cases, are thus vital to ensuring that the

rights of consumers are vindicated in court. The importance of

this public policy is not a matter of debate.

¶29 Additionally, attorneys who represent clients in fee-

shifting cases already take a significant risk that they will

not be paid, because they may not "win" a case. Ordinarily,

fees are awarded only to a "prevailing party." See, e.g.,

Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 483

U.S. 711 (1987). While we recognize the important right of a

client to settle, if a client has an unfettered right to settle

without counsel's involvement when a fee-shifting statute is

implicated, otherwise qualified attorneys will be discouraged

from practicing in this vitally important area of law.10
¶30 Nonetheless, the legislature has determined that an

award of attorney's fees under Wis. Stat. § 100.18(11) belongs

to the "person suffering pecuniary loss." Gorton v. Hostak,

Henzl & Bichler, S.C., 217 Wis. 2d 493, 503, 577 N.W.2d 617

(1998). Thus, statutory attorney's fees belong to the client

and not the attorney. Given this legislative determination and

10
For example, the record reflects that Megna is one of
only a handful of attorneys in Wisconsin who takes automobile
consumer rights cases.

12
 No. 2012AP183

the public policy considerations implicated in these matters,

both the purpose of fee-shifting statutes and the public

interest they promote are undermined when a client settles

without counsel and that settlement does not provide for

recovery of statutory attorney's fees.

¶31 In Zeisler v. Neese, the Seventh Circuit was presented

with a similar conflict involving a settlement that failed to

address the statutory right to recover attorney's fees. 24

F.3d 1000 (7th Cir. 1994). The Seventh Circuit's analysis in

Zeisler informs our conclusions in the case at issue and aids us

in balancing the competing public policy considerations.

¶32 In Zeisler the plaintiff, Carol Zeisler ("Zeisler"),

purchased a used car from Neese Motors ("Neese") using dealer

financing. Id. at 1001. Zeisler became unhappy with the

vehicle and contacted Attorney Barry Barash ("Barash") to

represent her in her dispute with Neese. Id. Barash agreed to

accept the case on a contingent fee basis, but neglected to

execute a fee agreement with Zeisler. Id. Through Barash,
Zeisler filed suit against Neese under the Truth in Lending Act,

15 U.S.C. §§ 1601 et seq, a fee-shifting statute.11 Id.

¶33 While the suit was pending, Zeisler defaulted on her

financing agreement with Neese, and Neese repossessed the car.

Id. Neese offered to provide Zeisler with a different, less

expensive vehicle in exchange for her agreement to dismiss the

11
The Truth In Lending Act provides that a creditor
violating the statute is liable for "a reasonable attorney's fee
as determined by the court." 15 U.S.C. § 1640(a)(3).

13
 No. 2012AP183

lawsuit. Id. Without consulting Barash, Zeisler agreed to the

settlement. Id. The settlement made no reference to attorney's

fees. Id. The trial court dismissed the suit over Barash's

objections. Id.

¶34 On appeal the Seventh Circuit affirmed the trial

court. Id. The court concluded that the statutory right to

recover attorney's fees belonged to the client and not the

attorney, and that the interests of the client were served by

encouraging settlement. Id. The court, acknowledging the

policy concerns involved, then addressed how attorneys could

protect their legitimate interest in receiving payment:

The lawyer can protect himself, moreover, though
not perfectly, by entering into a written contract
with his client in which the client assigns his
statutory right to attorney's fees to the lawyer.
Then the lawyer can enforce the right without the
participation of his client, as in Samuels v. American
Motors Sales Corp., 969 F.2d 573, 576–77 (7th Cir.
1992). If the client makes a settlement with the
defendant, waiving attorney's fees, and the defendant
has no notice of the assignment——no notice, that is,
that the entitlement to attorney's fees is not the
plaintiff's to waive——the lawyer can go against his
client for breach of contract. If the defendant does
have notice of the assignment, the lawyer can go
directly against the defendant. Salem Trust Co. v.
Manufacturers' Finance Co., 264 U.S. 182, 194 (1924);
Production Credit Ass'n v. Alamo Ranch Co., 989 F.2d
413, 417 (10th Cir. 1993).
Id. at 1002.

¶35 Thus, practically speaking, under Zeisler so long as

the written contract between the lawyer and the client so

provides, counsel can seek payment of attorney's fees from the
client. Moreover, when the written contract between the lawyer

14
 No. 2012AP183

and the client provides for a valid assignment of the right to

recover statutory attorney's fees, counsel may pursue such fees

from the defendant so long as the defendant had notice of the

assignment. In other words, if the parties enter into a private

settlement without the involvement of counsel, and the

settlement fails to provide for statutory attorney's fees,12 the

defendant may be found responsible for plaintiff's attorney's

fees only when the client assigned his or her right to recover

statutory attorney's fees to the attorney and the defendant had

notice of the assignment.

¶36 We adopt the standard, as posed in Zeisler, as an

appropriate framework to decide whether Megna can recover his

statutory attorney's fees directly from Diamond Jim's under

these circumstances.

¶37 At the outset, we note that it is undisputed that

neither Megna nor counsel for Diamond Jim's was involved in the

April 4, 2011 settlement agreement with Betz. It is likewise

undisputed that the settlement agreement between Betz and
Diamond Jim's failed to provide for payment of Megna's

attorney's fees. Thus, under the facts presented, the crux of

the matter before the court, as it was in Zeisler, is (1)

12
Although the Zeisler court used the term "waiver," we
expressly avoid that term in our statement of the standard.
This is because the term "waiver" under Wisconsin law is the
"intentional relinquishment of a known right." See, e.g.,
Brunton v. Nuvell Credit Corp., 2010 WI 50, ¶37, 325
Wis. 2d 135, 785 N.W.2d 302. The attorney's right to be paid,
however, was not explicitly addressed in the settlement
agreement in Zeisler, or in the case at issue.

15
 No. 2012AP183

whether Betz assigned his statutory right to recover attorney's

fees to Megna under the fee agreement, and if so, (2) whether

Diamond Jim's had notice of the assignment at the time of the

settlement.

¶38 Given the fact that Betz and Diamond Jim's settled

this case without counsel and without providing for Megna's

attorney's fees, we first address whether the fee agreement

provided for a valid assignment of the right to recover

statutory attorney's fees from Betz to Megna. In order to

determine whether Betz assigned his right to recover statutory

attorney's fees to Megna under the fee agreement, we look to the

fee agreement itself. A fee agreement is a contract. "When

construing contracts that were freely entered into, our goal 'is

to ascertain the true intentions of the parties as expressed by

the contractual language.'" Town Bank, 330 Wis. 2d 340, ¶33

(quoting State ex rel. Journal/Sentinel, Inc. v. Pleva, 155

Wis. 2d 704, 711, 456 N.W.2d 359 (1990)).

¶39 "In ascertaining the intent of the parties, contract
terms should be given their plain or ordinary meaning." Huml v.

Vlazny, 2006 WI 87, ¶52, 293 Wis. 2d 169, 716 N.W.2d 807. "'If

the contract is unambiguous, our attempt to determine the

parties' intent ends with the four corners of the contract,

without consideration of extrinsic evidence.'" Town Bank, 330

Wis. 2d 340, ¶33 (quoting Huml, 293 Wis. 2d 169, ¶52). "Only

when the contract is ambiguous, meaning it is susceptible to

more than one reasonable interpretation, may the court look
beyond the face of the contract and consider extrinsic evidence
16
 No. 2012AP183

to resolve the parties' intent." Id. (citing Capital Invs.,

Inc. v. Whitehall Packing Co., Inc., 91 Wis. 2d 178, 190, 280

N.W.2d 254 (1979)).

¶40 Megna argues that Betz assigned his statutory right to

recover attorney's fees to Megna under the fee agreement.

Alternatively, Megna argues that Betz's right to recover

attorney's fees should be equitably subrogated to Megna. In

either case, Megna argues that Betz lacked the right to

relinquish statutory attorney's fees against Diamond Jim's.

Under the logic of Zeisler, Megna's argument is unpersuasive.

¶41 "An assignment is the 'manifestation of the assignor's

intention to transfer' a right so that the assignee acquires the

right to performance by the obligor." Stilwell v. Am. Gen. Life

Ins. Co., 555 F.3d 572, 577 (7th Cir. 2009) (quoting Restatement

(Second) of Contracts § 317 (1981)). "It is essential to an

assignment of a right that the obligee manifest an intention to

transfer the right to another person without further action or

manifestation of intention by the obligee." Restatement
(Second) of Contracts § 324 (1981). No such manifestation

exists in the fee agreement at issue.

¶42 The terms of the fee agreement indicate that Betz

understood that "the defendant is usually responsible for

paying" attorney's fees in suits under Wis. Stat. § 100.18. The

agreement further provided that Betz's attorneys would "look to

the defendant for payment of attorney fees pursuant to the

fee[-]shifting provision once a lawsuit has been filed." These

17
 No. 2012AP183

qualified statements, however, cannot be fairly characterized as

a written assignment of Betz's statutory right to recover fees.

¶43 The fee agreement further provides for a number of

circumstances where Betz might have to pay for Megna's fees or

costs himself. For example, if the case had settled prior to

the filing of the lawsuit, Betz would have had to pay a flat

rate for Megna's fees. Similarly, if Betz had declined to

settle the case on terms his attorneys "deem[ed] reasonable," he

would have had to immediately pay all of Megna's costs up to

that point and continue to pay further costs as they became due.

Finally, the agreement provided that if either Betz or his

attorneys terminated the attorney-client relationship, Betz

would be responsible for paying both Megna's fees and costs.

These provisions provide evidence that Betz did not assign his

right to statutory attorney's fees to Megna in the fee

agreement. As a result, traditional principles of contract law

militate against finding that Betz assigned his right to

statutory attorney's fees to Megna.
¶44 Similarly, Megna's argument that Betz equitably

subrogated his right to recover statutory attorney's fees to

counsel is not compelling.

¶45 "'Subrogation is an equitable doctrine invoked to

avoid unjust enrichment, and may properly be applied whenever a

person other than a mere volunteer pays a debt which in equity

and good conscience should be satisfied by another.'" Ocwen

Loan Servicing, LLC v. Williams, 2007 WI App 229, ¶7, 305
Wis. 2d 772, 741 N.W.2d 474 (quoting Rock River Lumber Corp. v.
18
 No. 2012AP183

Universal Mortg. Corp. of Wis., 82 Wis. 2d 235, 240-41, 262

N.W.2d 114 (1978)). Courts are permitted "to grant equitable

remedies to private litigants in situations in which there is no

explicit statutory authority or in which the available legal

remedy is inadequate to do complete justice." Breier v. E.C.,

130 Wis. 2d 376, 388, 387 N.W.2d 72, 77 (1986); see also GMAC

Mortg. Corp. of Pa. v. Gisvold, 215 Wis. 2d 459, 479-80, 572

N.W.2d 466 (1998).

¶46 In the case at issue, we are presented with specific

statutory authority which grants the right to recover attorney's

fees to the plaintiff. Wis. Stat. § 100.18(11)(b)2. If we were

to conclude that the client's right to recover statutory

attorney's fees is equitably subrogated to the attorney once

counsel is retained, despite a fee agreement that does not

clearly assign that right, we would undermine the legislature's

explicit directive to the contrary. The legislature has

concluded that it is the client's right to recover statutory

attorney's fees. The equitable principles espoused by Megna do
not trump the language of the agreement or the legislative

directive.

¶47 Additionally, Megna is not necessarily without a

remedy if he is unable to recover directly from Diamond Jim's.

Megna could seek payment from Betz under their fee agreement.

For these reasons, equitable relief in the form of subrogation

is not appropriate in this case.

¶48 Further, to the extent this fee agreement could be
deemed unclear regarding Megna's right to recover statutory
19
 No. 2012AP183

attorney's fees from Betz or Diamond Jim's, "the burden is on

the attorney who possesses legal knowledge and who drafts the

agreement to state clearly the terms of the fee agreement and to

address specifically the allocation of court-awarded attorney

fees." Gorton, 217 Wis. 2d at 508; see also Ziolkowski Patent

Solutions Grp., S.C. v. Great Lakes Dart Mfg., Inc., 2011 WI App

11, ¶13, 331 Wis. 2d 230, 794 N.W.2d 253 (holding that attorneys

have the burden to clearly draft their legal fee agreements).

¶49 Given that written fee agreements are required, see

SCR 20:1.5(c), attorneys are cautioned to clearly draft a fee

agreement so that it unambiguously assigns the client's

statutory right to recover attorney's fees from the defendant

under these circumstances. As discussed, vital public policy

interests are at stake.

¶50 A clear fee agreement not only protects the attorney,

but also protects the client and avoids conflict. A more

clearly drafted fee agreement in the case at issue would have

resolved the problem without the necessity of additional
litigation.

¶51 Because Megna's fee agreement failed to clearly secure

an assignment from Betz in the case at issue, his remedy against

Diamond Jim's is foreclosed.

¶52 Finally, because we conclude that the fee agreement

does not provide for a valid assignment of Betz's right to

recover statutory attorney's fees to Megna, we conclude that the

second Zeisler criterion cannot be met. Because there was no
assignment between Betz and Megna, Diamond Jim's could not know
20
 No. 2012AP183

of the assignment. As a result, the Zeisler test is not met in

this regard either.

V. CONCLUSION

¶53 We conclude that the statutory right to recover

attorney's fees belonged to Betz, and that Betz did not assign

his right to recover those fees to Megna in their fee agreement.

Because we conclude that Betz did not assign his right to

recover statutory attorney's fees to Megna, we must conclude

that Diamond Jim's could not have had notice of the assignment.

As a result, we conclude that Megna may not seek statutory

attorney's fees directly from Diamond Jim's, and that the

settlement agreement entered into between Diamond Jim's and Betz

is clear, unambiguous, and enforceable. We therefore reverse

the court of appeals.

By the Court.—The decision of the court of appeals is

reversed.

¶54 PATIENCE DRAKE ROGGENSACK, J., did not participate.

21
 No. 2012AP183.ssa

¶55 SHIRLEY S. ABRAHAMSON, C.J. (dissenting). The issue

before the court is whether the written fee agreement between

Randy Betz, the client, and Vince Megna, the attorney,

transferred the client's right to statutory attorney fees to the

attorney. The majority opinion, ¶43, purports to apply

"traditional principles of contract law" to decide the issue.

It does not.

¶56 The majority opinion interprets the text of the fee

agreement in a scant three paragraphs, ¶¶41, 42, and 43, without

any analysis, proof, authority, or resort to contract

principles.

¶57 At ¶41, without any analysis, proof, authority, or use

of principles of contract interpretation, the majority opinion

recites the rule that an assignment depends on the assignor's

intention and then pronounces in a single sentence that "no such

manifestation [of the assignor's intention to transfer a right]

exists in the fee agreement at issue."1 Nothing more to analyze

here.

1
The full text of the majority opinion, ¶41, reads as
follows:

"An assignment is the 'manifestation of the assignor's
intention to transfer' a right so that the assignee
acquires the right to performance by the obligor."
Stilwell v. Am. Gen. Life Ins. Co., 555 F.3d 572, 577
(7th Cir. 2009) (quoting Restatement (Second) of
Contracts § 317 (1981)). "It is essential to an
assignment of a right that the obligee manifest an
intention to transfer the right to another person
without further action or manifestation of intention
by the obligee." Restatement (Second) of Contracts
§ 324 (1981). No such manifestation exists in the fee
agreement at issue.

1
 No. 2012AP183.ssa

¶58 At ¶42, without any analysis, proof, authority, or use

of principles of contract interpretation, the majority opinion

pronounces that because the "FEE SHIFTING" provision has

"qualified statements" it "cannot be fairly characterized as a

written assignment of Betz's statutory right to recover fees."

¶59 At ¶43, without any analysis, proof, authority, or use

of principles of contract interpretation, the majority opinion

pronounces that various parts of the fee agreement that

"provide[] for a number of circumstances in which Betz might

have to pay for Megna's fees or costs himself" "provide evidence

that Betz did not assign his right to statutory attorney's fees

to Megna in the fee agreement."

¶60 Rather than apply rules of contract interpretation,

some of which the majority opinion dutifully recites, the

majority opinion simply decrees, ipse dixit, that the language

of the fee agreement does not mean what it says. This

resolution cannot be correct.2 The fee agreement unambiguously

assigned Betz's right to attorney's fees to Megna.
¶61 This court's pronouncements about assignments extend

beyond the instant case. Assignments are frequently the subject

of litigation in this court. This court has considered

assignments in other cases and contexts, each with its own

2
At the circuit court, the attorney moved to intervene to
make a claim against the defendant for tortious interference
with the fee agreement. Neither the parties nor I address this
issue or any potential claim the attorney may have against the
defendant.

2
 No. 2012AP183.ssa

particularities due to the circumstances of the case.3 Although

each of these cases involves a slightly different fact scenario,

a central question is the same——did the parties execute an

effective assignment?

I

¶62 I apply the following principles of contract law to

the instant case.

¶63 The Restatement (Second) of Contracts, relied upon by

the majority opinion, ¶41, defines an assignment as follows:

"An assignment is the 'manifestation of the assignor's intention

to transfer' a right so that the assignee acquires the right to

performance by the obligor."4

¶64 The Restatement does not require any particular

formalities to be observed to make an effective assignment.5 "No
3
See, e.g., Anthony Gagliano & Co. v. Openfirst, 2014 WI
65, ___ Wis. 2d ___, ___N.W.2d ___ (disputing whether a
transfer of property rights constituted an assignment or a
sublease); Dow Family, LLC v. PHH Mortgage Corp., 2014 WI 56,
___ Wis. 2d ___, ___N.W.2d ___ (disputing whether an assignment
of a mortgage deed was valid as to a later purchaser of
property); see also Attorney's Title Guaranty Fund v. Town Bank,
2014 WI 63, ___ Wis. 2d ___, ___N.W.2d ___ (disputing whether
the proceeds of a legal malpractice claim could be assigned).
4
Restatement (Second) of Contracts § 317 (quoted by
majority op., ¶41 (emphasis added)).
5
See 9 Corbin on Contracts § 47.7, at 147-48 (rev. ed.
2007) ("[I]n the absence of statute or a contract provision to
the contrary, there are no prescribed formalities that must be
observed to make an effective assignment. It is sufficient if
the assignor has, in some fashion, manifested an intention to
make a present transfer of his rights to the assignee."). See
also Restatement (Second) of Contracts § 2 cmt. b. ("A promisor
manifests an intention if he believes or has reason to believe
that the promisee will infer that intention from his words or
conduct.").
3
 No. 2012AP183.ssa

words of art are required to constitute an assignment; any words

that fairly indicate an intention to make the assignee owner of

a claim are sufficient."6 The assignment requires only that "the

obligee manifest an intention to transfer the right to another

person without further action or manifestation of intention by

the obligee."7

¶65 The phrase "manifestation of intention" is a basic

concept in contract formation in the Restatement (Second) of

Contracts. The phrase "adopts an external or objective standard

for interpreting conduct; it means the external expression of

intention as distinguished from undisclosed intention."8

¶66 To determine the parties' "manifestation of

intention," the courts apply other well-accepted rules of

contract interpretation: "We interpret a contract to give

'reasonable meaning to each provision and without rendering any

portion superfluous.'"9 "A writing is interpreted as a whole"10

and words "are interpreted in the light of all the

circumstances, and if the principal purpose of the parties is
ascertainable it is given great weight."11
6
29 Richard Lord, Williston on Contracts § 74:3 (4th ed.
2003).
7
Restatement (Second) of Contracts § 324 (1981) (emphasis
added).
8
Restatement (Second) of Contracts § 2, cmt. b.
9
Sonday v. Dave Kohel Agency, Inc., 2006 WI 92, ¶21, 293
Wis. 2d 458, 471, 718 N.W.2d 631 (internal quotation marks &
citation omitted).
10
Restatement (Second) of Contracts § 202(2).
11
Restatement (Second) of Contracts § 202(1).
4
 No. 2012AP183.ssa

¶67 "Because the scope of retainer agreements varies from

attorney to attorney and case to case," inquiries about the

meaning of a retainer and fee allocation agreement between an

attorney and a client "are necessarily fact intensive."12

¶68 The meaning given to words "depends to a varying

extent on the context and on the prior experience of the

parties."13 In other words, the essence of the meaning of the

words of a contract is found in how a reasonable person would

understand the terms, having in mind the context of the

transaction. Our courts interpret contracts to give them

"common sense"14 and "realistic"15 meaning.

¶69 When there is an ambiguity, the courts look to

extrinsic evidence to resolve the parties' intent.16 Extrinsic

evidence can include the conduct of the parties, their

negotiations before and after the execution of the documents,

12
Gorton v. Hostak, Henzl & Pichler, S.C., 217 Wis. 2d 493,
505, 577 N.W.2d 617 (1998).
13
Restatement (Second) of Contracts § 20, cmt. b.
14
See D. Canale & Co. v. Pauly & Pauly Cheese Co., 155
Wis. 541, 145 N.W. 372 (1914) (interpreting a contract's place
of performance clause by viewing the acts of the parties "from a
common sense standpoint"); Mikula v. Miller Brewing Co., 2005 WI
App 92, ¶22, 281 Wis. 2d 712, 701 N.W.2d 613 (interpreting an
insurance contract using a "common sense" reading of the text).
15
See Bradish v. British Am. Assur. Co. of Toronto, Canada,
9 Wis. 2d 601, 604-05, 101 N.W.2d 814 (1960) (interpreting a
contract under the more "realistic" connotation of its terms)
(citing Travelers Fire Ins. Co. v. Whaley, 272 F.2d 288, 290-91
(10th Cir. 1959)).
16
Majority op., ¶39 (quoting Town Bank v. City Real Estate
Development, LLC, 2010 WI 134, ¶33, 330 Wis. 2d 340, 793
N.W.2d 476.

5
 No. 2012AP183.ssa

the acts and deeds in connection with surrounding circumstances,

and their words.17

II

¶70 I now apply these interpretive aids to the text of the

fee agreement.

¶71 I have attached a true and correct copy of the fee

agreement to give the full text of the agreement.

¶72 The text of the fee agreement at issue is not derived

from a legal form book. It is written in plain English, a

practice that should be commended.18

¶73 The text of the fee agreement, giving meaning to each

provision read separately and to the text read as a whole,

clearly manifests an intention in plain English that the

attorney will look to the defendant for attorney fees in some

circumstances, and to the client in other circumstances.

¶74 The circuit court interpreted the agreement as I do.

The circuit court declared:

17
See Kernz v. J.L. French Corp., 2003 WI App 140, ¶10, 266
Wis. 2d 124, 667 N.W.2d 751.
18
See, e.g., Yauger v. Skiing Enters., Inc., 206
Wis. 2d 76, 87 & n.2, 557 N.W.2d 60 (1996) (noting that
negligence waivers in contracts "should be preceded by a clear,
not misleading, heading and should not be written in legal
jargon"); Commercial Union Midwest Ins. Co. v. Vorbeck, 2004 WI
App 11, ¶¶46-49, 269 Wis. 2d 204, 674 N.W.2d 665 (Brown, J.,
concurring) (deploring the use of jargon in insurance contracts
and citing Wis. Stat. § 631.22, which requires that a consumer
insurance policy be "written in commonly understood language");
Pietroske, Inc. v. Globalcom, Inc., 2004 WI App 142, ¶9, 275
Wis. 2d 444, 685 N.W.2d 884 (noting that whether a contract term
or condition is "in plain English" bears on whether it is
unconscionable).

6
 No. 2012AP183.ssa

The fee-shifting provision addresses with whom the
right to collect attorney fees vests. It transfers
the authority from Betz to Attorney Megna. It
provides Attorney Megna with the authority to seek
attorney fees from the Defendant if Betz succeeds with
his Wis. Stat. § 100.18 claim at trial or during
settlement with Diamond Jim's. Thus, Attorney Megna
may certainly have the right to seek attorney fees in
the appropriate situation.
The circuit court was correct.

¶75 The words of the agreement itself support this

interpretation.

¶76 The agreement is divided into several parts, with a

bold-faced, capitalized heading preceding each part. Each part

of the fee agreement explains the allocation of attorney fees

under a particular set of circumstances.

¶77 The headings are descriptive of four various

circumstances under which fees are to allocated: "FEE SHIFTING,"

"SETTLEMENT PRIOR TO LAWSUIT," "COSTS AND EXPENSES," and

"TERMINATION." The purpose of this agreement is to establish

when the client pays the attorney's fees, and when the defendant

pays the attorney's fees.

¶78 The words that manifest an intention to give the

attorney the right to collect attorney's fees are in the part

labeled "FEE SHIFTING." The agreement explicitly uses the words

"FEE SHIFTING" and explicitly refers to the attorney fee

shifting statute, Wis. Stat. § 100.18.

¶79 The agreement states under the heading "FEE SHIFTING"

the following:

FEE SHIFTING

I understand that Sec. 100.18, Wis. Stats., _______ is
a fee shifting statute. This means if I win at trial
7
 No. 2012AP183.ssa

or settle my case during litigation, the defendant is
usually responsible for paying my attorney fees based
on my attorney's hourly rate. I understand that the
Law Offices of Vince Megna is accepting my case with
the agreement that it will look to the defendant for
payment of attorney fees pursuant to the fee shifting
provision once a lawsuit has been filed (emphasis
added).
¶80 The "FEE SHIFTING" provision unqualifiedly states the

circumstances under which the attorney will pursue the attorney

fees from the defendant: In exchange for the law firm's

agreement to take the case, the client and attorney agree that
the attorney "will look to the defendant for payment of attorney

fees pursuant to the fee shifting provision once a lawsuit has

been filed" (emphasis added).

¶81 The "FEE SHIFTING" provision states that the defendant

is usually responsible for paying the client's attorney's fees

and that the attorney "will" pursue fees from the defendant, not

that the attorney may or could do so. Obviously, the attorney

cannot look to the defendant for statutory attorney's fees

unless the client agrees that the fees belong to the attorney

and not the client. By signing the agreement, the client agrees

to this arrangement.

¶82 The language in the "FEE SHIFTING" provision states,

in plain English, the basic terms of the transfer (assignment)

of a statutory fee award in litigation from the client to the

lawyer and meets all the requirements of an assignment:

• Who is entitled to statutory fees? The client.

• Who gets the statutory fees? The attorney.

8
 No. 2012AP183.ssa

• What attorney fees are being transferred? "[P]ayment

of attorney fees pursuant to the fee-shifting statute

once a lawsuit has been filed."

• Is there additional action or manifestation of

intention required by the client? No.

¶83 The majority opinion, ¶42, dismisses the "FEE

SHIFTING" provision as "qualified statements" that "cannot be

fairly characterized as an assignment of Betz's statutory right

to recover fees." Majority op., ¶42.19 Notably, the majority

opinion does not offer which words "qualify" the last sentence,

which states that in exchange for taking the case, the attorney

will pursue attorney fees from the defendant.

¶84 Unable to provide a qualifier for the key last

sentence of the "FEE SHIFTING" provision, the majority opinion,

¶42, instead focuses on the word "usually" in the second

sentence, which states that if there is litigation, "the

defendant is usually responsible for paying my attorney fees

based on my attorney's hourly rate" (emphasis added).
¶85 The word "usually" in the second sentence is a correct

non-legalese statement of the law. A court usually holds the

19
The majority opinion reads at ¶42 as follows:

The terms of the fee agreement indicate that Betz
understood that "the defendant is usually responsible
for paying" attorney's fees in suits under Wis. Stat.
§ 100.18. The agreement further provided that Betz's
attorneys would "look to the defendant for payment of
attorney fees pursuant to the fee[-]shifting provision
once a lawsuit has been filed." These qualified
statements, however, cannot be fairly characterized as
a written assignment of Betz's statutory right to
recover fees.

9
 No. 2012AP183.ssa

defendant liable for the plaintiff's attorney fees based on the

attorney's hourly rate as stated in the fee agreement. But

courts do not always do so.

¶86 The real problem the fee agreement faces in the

majority opinion is that the text of the "FEE SHIFTING"

provision is not in the typical formalistic assignment language

the majority expects. It does not use the legalese of generic

boilerplate forms for assignments, nor does it use the legal

jargon of "assign" or "transfer."

¶87 "[O]ur profession disdains plain speech."20 Judges

would probably better understand the agreement in the instant

case if it were drafted in traditional legalese assignment

language used in legal form guides that read something like the

following:

In exchange for value received, I, ________, of
_________ [address], as assignor, assign and transfer
to ___________, of ___________[address], as assignee,
assignee's legal representatives and assigns, for
assignee and their use and benefit, any and
all . . . .21

20
United States v. Collins, 510 F.3d 697, 699 (7th Cir.
2007).
21
1 Jay E. Grenig, Wisconsin Legal Forms § 8:24 (updated
2014) (available on Westlaw).

In another recent case, Attorney's Title Guaranty Fund v.
Town Bank, 2014 WI ___, ___ Wis. 2d ___, ___ N.W.2d ___, similar
assignment language was used after a detailed listing of various
legal malpractice claims:

Now therefore, in order to induce [the assignor] to
loan [the assignee] $195,000.00, pursuant to the
provisions of a certain Mortgage Note . . . , [the
assignor] hereby assigns and transfers his interest
in . . . the proceeds resulting from each of the above
10
 No. 2012AP183.ssa

¶88 In contrast, the client probably better understands

the plain English version Attorney Megna used, which states that

Megna, not the client, gets statutory fees from the defendant in

litigation.

¶89 The majority opinion ignores the rule of

interpretation that no particular magic words are needed to

manifest an intention to assign. Instead, the majority opinion

sends a message to attorneys who represent clients in cases

where fee-shifting statutes apply: use legalese, not plain

English. The majority opinion seems to endorse attorneys who

use the legalese version of assignment, in which the client "in

exchange for valuable consideration, hereby assigns and

transfers the right to pursue attorney's fees, pursuant to

[statute], to [attorney] of [address] and all [attorney's] legal

assigns and heirs" and so forth.

¶90 The majority opinion ignores the rule of

interpretation that requires us to give reasonable meaning to

each word of the contract. What reasonable meaning does the
"FEE SHIFTING" provision have if it is not an assignment of

rights to legal fees in the event of a lawsuit? The majority

opinion renders this language meaningless and superfluous.

¶91 Other provisions of the fee agreement support

interpreting the "FEE SHIFTING" provision as assigning to the

attorney the right to collect attorney's fees from the defendant

if there is litigation. The agreement repeatedly treats the

described Claims to [the assignee] together with its
successors and assigns . . . .

11
 No. 2012AP183.ssa

attorney, not the client, as the owner of the attorneys fees

paid by the defendant and awarded under the fee shifting statute

when litigation ensues. See, for example, the following:

• I [the client] understand that the Law Offices of
Vince Megna will charge the other side its
current rates that are then charged at the time
of request for payment of its fees. ["HOURLY
RATE"] (Emphasis added.)

• In addition to all other fees paid to the Law
Offices of Vince Megna by the other side, I agree
to pay the Law Offices of Vince Megna . . . .
["ADDITIONAL RECOVERY"] (Emphasis added.)

• In addition to all other fees paid to the Law
Offices of Vince Megna by the other side, I agree
to pay the Law Offices of Vince Megna 40% of any
punitive damages recovered, whether through
settlement or judgment. ["PUNITIVE DAMAGES"]
(Emphasis added.)

• If a settlement is reached prior to a lawsuit
being filed . . . the defendant may not be
responsible for payment of my attorney fees. In
this event, the Law Offices . . . agrees to
charge a flat rate attorney fee in the amount of
______________ [left blank] ["SETTLEMENT PRIOR TO
LAWSUIT"]
¶92 In each instance, the agreement treats the attorney,
not the client, as the holder of the right to attorney's fees

paid by the defendant.

¶93 The fee agreement sets forth various fee allocations

under differing circumstances. The majority opinion asserts

that these provisions for fee allocation under circumstances

other than litigation "provide evidence that Betz did not assign

his right to statutory attorney's fees to Megna in the fee

agreement." Majority op., ¶43.22
22
The majority opinion reads at ¶43 as follows:
12
 No. 2012AP183.ssa

¶94 The majority does not say, and I cannot figure out,

why a provision requiring Betz to pay fees or costs under

certain circumstances (for example, if no lawsuit were filed)

means that "principles of contract law militate against finding

that Betz assigned his right to statutory attorney's fees to

Megna." Majority op., ¶43.

¶95 The assignment of attorney fees is thus effective

under certain circumstances; the assignment does not come into

play should certain other circumstances come to pass. There is

nothing unusual about this arrangement.

¶96 I conclude, as did the circuit court, that the text of

the "FEE SHIFTING" provision and the text of the agreement as a

whole demonstrate a manifest intention to assign the claim to

legal fees under Wis. Stat. § 100.18 to the attorney in the

event of litigation.

The fee agreement further provides for a number of
circumstances where Betz might have to pay for Megna's
fees or costs himself. For example, if the case had
settled prior to the filing of the lawsuit, Betz would
have had to pay a flat rate for Megna's fees.
Similarly, if Betz had declined to settle the case on
terms his attorneys "deem[ed] reasonable," he would
have had to immediately pay all of Megna's costs up to
that point and continue to pay further costs as they
become due. Finally, the agreement provided that if
either Betz or his attorneys terminated the attorney-
client relationship, Betz would be responsible for
paying both Megna's fees and costs. These provisions
provide evidence that Betz did not assign his right to
statutory attorney's fees to Megna in the fee
agreement. As a result, traditional principles of
contract law militate against finding that Betz
assigned his right to statutory attorney's fees to
Megna.

13
 No. 2012AP183.ssa

III

¶97 This interpretation is supported not only by the text

but also by the context in which the fee agreement was executed

and operates, namely the Wisconsin lemon law allowing claims for

defective cars and Wis. Stat. § 100.18 governing suits for

misrepresentation. Words in a contract "are interpreted in the

light of all the circumstances, and if the principal purpose of

the parties is ascertainable it is given great weight."23

¶98 A car purchase, next to a home purchase, is the

largest single expenditure of many people. When a consumer

purchases a defective car, the lemon law statutes and Wis. Stat.

§ 100.18 are designed to give the consumer a remedy. Both

statutes are fee-shifting statutes that modify the American rule

regarding who pays the attorney.24 Ordinarily in the United

States the prevailing party does not collect attorney fees from

the opposing party.25 Thus plaintiffs in relatively small-

dollar-amount consumer cases often cannot afford to seek relief

if they have to incur and pay attorney fees. The lemon law and
Wis. Stat. § 100.18 address this fact of life.26

¶99 In cases governed by the lemon law and Wis. Stat.

§ 100.18 (explicitly referenced in the "FEE SHIFTING"

23
Restatement (Second) of Contracts § 202 (1).
24
See Cook v. Pub. Storage, Inc., 2008 WI App 155, ¶85, 314
Wis. 2d 426, 761 N.W.2d 645.
25
Winkleman v. Beloit Mem'l Hosp., 168 Wis. 2d 12, 28, 483
N.W.2d 211 (1992).
26
See majority op., ¶¶26-29.

14
 No. 2012AP183.ssa

provision), payment for the plaintiff's attorney fees shifts

from the plaintiff to the defendant.

¶100 The legislature has expressed this vital public policy

of the state favoring fee shifting in lemon law and

misrepresentation cases to ensure the rights of consumers:

"Fee-shifting statutes, and the attorneys who represent clients

in such cases, are thus vital to ensuring that the rights of

consumers are vindicated in court."27

¶101 Attorney Megna holds himself out as, and is known as,

one of the few attorneys in Wisconsin who takes lemon law

cases.28

¶102 This is the context in which the fee agreement at

issue was executed. Indeed, the majority opinion, ¶¶26-29,

discusses the importance that the legislature has given to the

fee-shifting statutes in enforcing the consumer-protection laws

at issue in the instant case.

¶103 The majority opinion acknowledges, and rightly so,

that the defendant should not be able to circumvent the fee-
shifting statute's public policy by cutting attorneys out of

their ability to collect attorney's fees through unfettered out-

of-court settlement:

While we recognize the important right of a client to
settle, if a client has an unfettered right to settle
without counsel's involvement when a fee-shifting
statute is implicated, otherwise qualified attorneys

27
Majority op., ¶28 (emphasis added).
28
See majority op., ¶29 n.10 ("For example, the record
reflects that Megna is one of only a handful of attorneys in
Wisconsin who takes automobile consumer rights cases.").

15
 No. 2012AP183.ssa

will be discouraged from practicing in this vitally
important area of law.
Majority op., ¶29. I agree with the majority opinion's analysis

of the legislature's mandated public policy.

¶104 Why then does the majority opinion ignore the

legislative declaration of public policy in deciding the instant

case? The majority opinion does not say.

¶105 In sum, when I apply the rules of contract

interpretation, I conclude that the text and context of the

entire fee agreement demonstrate that the agreement assigned the

statutory fees from the client to the attorney in the

circumstances listed in the "FEE SHIFTING" provision, namely

litigation.

IV

¶106 A few other matters regarding contract interpretation

emerge in the majority opinion.

¶107 In the end, the majority opinion never truly decides

whether there are competing reasonable interpretations of the

fee agreement requiring a court to look beyond the four corners

of the contract to interpret its meaning. Instead, the majority

opinion waffles.

¶108 On the one hand, the majority opinion can be

interpreted as treating the agreement as unambiguous, looking

only to the text and never citing any extrinsic evidence to

determine the intent of the parties.

¶109 On the other hand, the majority opinion views the fee

agreement as potentially "unclear" on the subject of the
assignment of attorney's fees. Majority op., ¶48.

16
 No. 2012AP183.ssa

¶110 If the fee agreement is "unclear," the intention of

the parties is a question of fact to be determined by the finder

of fact after being presented with extrinsic evidence.

¶111 I would recognize the fee agreement for what it is, an

unambiguous assignment of the right to attorney's fees from Betz

to Attorney Megna.

¶112 Furthermore, the majority opinion apparently assumes,

without discussion, that the fee agreement is an integrated

contract.

¶113 Yet this contract on its face is not complete and

therefore is not fully integrated. There is a blank in the fee

agreement that is not filled in. The amount Attorney Megna will

charge the client in the "SETTLEMENT PRIOR TO LAWSUIT" provision

is left blank.

¶114 A blank in a contract on a material matter indicates

that the contract is not fully integrated and that extrinsic

evidence may be used to understand the intention of the parties.

¶115 Rather than looking to extrinsic evidence, as dictated
by our rules of contract interpretation for unclear or non-

integrated contracts, the majority opinion asserts that the

burden is on the attorney "to state clearly the terms of the fee

agreement and to address specifically the allocation of court-

awarded attorney's fees." Majority op., ¶48 (quoting Gorton v.

Hostak, Henzl & Pichler, S.C., 217 Wis. 2d 493, 508, 577

N.W.2d 617 (1998) and citing Ziolkowski Patent Solutions Grp.,

S.C. v. Great Lakes Dart Mfg., Inc., 2011 WI App 11, ¶13, 331
Wis. 2d 230, 794 N.W.2d 253).

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¶116 In the Gorton case, the fee agreement was a contingent

fee agreement. The fee agreement was silent regarding the

allocation of reasonable attorney fees under Wis. Stat.

§ 100.18. Statutory attorney fees were awarded. The Gorton

court held that the distribution of the statutory attorney fee

award was governed by the contract between the parties.29 The

contingent fee agreement in Gorton did not "address

specifically" the allocation of statutory attorney's fees, and

the attorney did not receive statutory fees.

¶117 In contrast, in the instant case the "FEE SHIFTING"

provision does exactly what the fee agreement in Gorton did not

do——the fee agreement at issue addresses specifically the

allocation of statutory attorney fees.

¶118 Furthermore, in Gorton the dispute about who was

entitled to the statutory attorney fees pursuant to the fee

agreement between the attorney and the client was between the

attorney and the client. The attorney and client were

adversaries. To the extent that the agreement between the
attorney and client in Gorton did not specifically address the

allocation of statutory attorney fees, the attorney, who had

obviously drafted the agreement and who had legal expertise,

lost.

¶119 In the instant case, no dispute exists between the

attorney (Megna) and the client (Betz) that, pursuant to their

fee agreement, the attorney, not the client, has the right to

29
Gorton, 217 Wis. 2d at 508.

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any statutory attorney fees.30 The dispute in the instant case

about who is entitled to statutory attorney fees is between

Megna, as Betz's attorney, and Diamond Jim's, as the potential

payor of the statutory attorney fees. Thus, the rule stated in

Gorton governing interpretation of a fee agreement in a dispute

between the attorney and client does not apply in the present

case.

¶120 The interpretation of the fee agreement proposed by

the majority opinion is, unfortunately, troubling on too many

different fronts.

¶121 For the foregoing reasons, I dissent. I would remand

the case to the circuit court to determine whether the defendant

had notice of the assignment.

30
Megna continues to represent Betz and has averred that he
has made no claim and plans to make no claim against his client.

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