Thursday, June 24, 2010

Decision in 'Groshek v. Trewin' 2010 WI 51

Wisconsin Supreme Court Rules Punitive Damages Unavailable When No Compensatory Damages Awarded, by Andrew Cook, Hamilton Consulting Group

Wisconsin Supreme Court decision today in this case (2008AP787) affirming the Court of Appeals. See Argument.

Opinion by Justice Crooks, joined by Justices Bradley, Prosser, Roggensack, Ziegler, and Gableman.
¶1 This is a review of an unpublished decision of the court of appeals[footnote omitted] concerning rescission of a real estate contract on the grounds that the circumstances surrounding the transaction——an attorney's purchase of land from clients whose bankruptcy petition he handled——constituted a breach of fiduciary duty.
¶3 We conclude that the findings of fact are supported by the evidence and that they satisfy the elements of a claim for breach of fiduciary duty, and we therefore affirm the court of appeals' decision that the attorney breached his fiduciary duty and that rescission is therefore warranted.

¶4 We also affirm the court of appeals' decision that punitive damages are not available in this case. The court of appeals' rationale focused on the equitable nature of the case; however, our decision is based on the rule articulated in Tucker v. Marcus[142 Wis. 2d 425, 439, 418 N.W.2d 818 (1988), footnote omitted], that where there is no award of compensatory damages, punitive damages are not available.
Concurrence and dissent by Chief Justice Abrahamson.
¶52 ... the actual damages requirement means that the claimant must establish a cause of action, whether at law or in equity, before punitive damages can be awarded.[footnote omitted] Once there is a valid cause of action and thus a legally cognizable harm, no reason exists to deny punitive damages merely because the claimant's relief is not pecuniary. ...

Attorney breached fiduciary duty, Wisconsin Law Journal