Wisconsin Supreme Court Rules Punitive Damages Unavailable When No Compensatory Damages Awarded
The Wisconsin Supreme Court has ruled that a plaintiff is not
entitled to punitive damages in cases where the plaintiff seeks
equitable damages and where no compensatory damages are awarded.
The case, Groshek v. Trewin, 2010 WI 51 (2008AP787) involves a
lawsuit against an attorney who entered into an agreement to
purchase a farm and saw mill from one of his clients, and then
offered to lease the land back to them. The attorney's clients
stopped making payments and sued the attorney for breach of
fiduciary duty and sought rescission of the contract.
The trial court ruled that the attorney breached his fiduciary
duty to his clients and granted rescission of the conveyance of
the property. The circuit court also determined that punitive
damages were appropriate citing the vulnerability of the
clients, access the attorney had gained as counsel to his
clients, and the attorney's repeated discipline for improperly
making similar transactions with other clients.
The attorney appealed the decision. The court of appeals upheld
the lower court's decision finding breach of fiduciary duty and
rescission. However, the court of appeals reversed the lower
court's decision to award punitive damages when no compensatory
damages were awarded.
Writing for the majority, Justice Patrick Crooks upheld the
court of appeals and lower court and found that the attorney
breached his fiduciary duty to his clients. The Supreme Court
further ruled that the plaintiffs were not entitled to punitive
damages when the lower court did not award the plaintiffs
compensatory damages.
Citing Tucker v. Marcus, 142 Wis. 2d 425, 439, 418 N.W.2d 818
(1988), the Wisconsin Supreme Court stated that "punitive
damages are not available where there has been no 'award' of
actual damages." According to the majority, because the
plaintiff in the case did not seek compensatory damages, nor
were any awarded, existing Wisconsin case law barred the
plaintiffs from recovering punitive damages.
