Marten Transport, Ltd. v. Hartford Specialty Co.

533 N.W.2d 452, 194 Wis. 2d 1, 1995 Wisc. LEXIS 81
CourtWisconsin Supreme Court
DecidedJune 19, 1995
Docket92-1416
StatusPublished
Cited by22 cases

This text of 533 N.W.2d 452 (Marten Transport, Ltd. v. Hartford Specialty Co.) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marten Transport, Ltd. v. Hartford Specialty Co., 533 N.W.2d 452, 194 Wis. 2d 1, 1995 Wisc. LEXIS 81 (Wis. 1995).

Opinions

JANINE P. GESKE, J.

This is a review of a published decision of the court of appeals, Marten Transp. Ltd. v. Hartford Specialty Co., 180 Wis. 2d 285, 509 N.W.2d 106 (Ct. App. 1993), which reversed a nonfinal order of the circuit court for Milwaukee County, William D. Gardner, Circuit Judge. The circuit court denied a motion of defendants Hartford Specialty Co., et al. (Hartford) to disqualify the law firm of Christopher D. Walther & Associates, S.C. (the Walther firm) as attorneys for plaintiff Marten Transport Ltd. (Marten).

The issue before this court is whether the circuit court erroneously exercised its discretion when it concluded that an attorney-client relationship did not exist between the Walther firm and Hartford and denied Hartford's motion to disqualify the Walther firm as counsel for Marten. We conclude that the cir[9]*9cuit court did not erroneously exercise its discretion. Accordingly, Wisconsin Supreme Court Rules (SCR) 20:1.7 and 20:1.9 cannot be invoked to disqualify the Walther firm from further representation of Marten.1

I.

Numerous facts in this case are undisputed. Marten retained the Walther firm in 1985, approximately two years before it purchased insurance from Hartford.

[10]*10From July 1987 through December 1989, Hartford insured Marten under general liability, auto liability, and worker's compensation policies. Each of the policies had deductibles of $250,000 per claim. The premiums for general liability and worker's compensation were calculated retrospectively, after losses during the policy period were incurred, and based upon the insured's actual covered loss experience during the policy period.2 Marten's retrospective policy provided for a maximum retrospective premium. Further, under a retrospectively rated policy, claims are paid with the insured's money, allowing a company such as Marten to self-insure within certain dollar limits, while paying a commission to the insurer to settle and administer claims. In this case, Hartford provided such claims handling and administrative services to Marten.

[11]*11In 1989, Marten informed Hartford that the Walther firm would be acting as its general litigation counsel, defending Marten against worker's compensation claims brought under the Hartford policies. Hartford initially objected to this arrangement because: (a) the Walther firm was not on Hartford's list of approved attorneys; (b) under its insurance contracts with Marten, Hartford agreed to defend Marten against any claim, proceeding, or suit against it for benefits payable by the insurance; (c) Hartford's obligation to defend included retaining or employing attorneys in the name of Hartford or Marten; and (d) in addition to the obligation to investigate, defend and settle claims, the insurance contracts obligated Hartford to pay any benefits required of Marten by the worker's compensation law. Ultimately, Hartford assented to Marten's use of the Walther firm on worker's compensation claims. All legal fees incurred for work done by the Walther firm were paid by Marten.

The'Walther firm, acting as counsel for Marten, commenced an action against Hartford in December 1991, alleging negligence and breach of contract in the administration and adjustment of worker's compensation claims under the insurance contracts between Marten and Hartford.3 On February 14,1992, Hartford filed a motion to disqualify the Walther firm under SCR 20:1.7 and SCR 20:1.9, on the grounds that the Walther firm previously represented and continued to [12]*12represent both Marten and Hartford. Marten responded by arguing that no attorney-client relationship ever existed between the Walther firm and Hartford or, in the alternative, that the representation was so limited in scope that it did not give rise to a conflict of interest for the Walther firm.

The circuit court denied the motion and found that Hartford was at all times aware that an attorney-client relationship existed between Marten and the Walther firm and that appearances entered by the Walther firm on behalf of Hartford were pro forma and consistent with the demands of Wisconsin's worker's compensation law regarding mandatory insurance coverage. Consequently, according to the circuit court, no attorney-client relationship existed between the Walther firm and Hartford.

In reversing the decision of the circuit court, the court of appeals concluded that "the undisputed facts lead to the necessary conclusion that an attorney-client relationship exists between Hartford and Walther . . . [requiring] Walther's disqualification . . . under [Wisconsin Supreme Court Rule] 20:1.7." Marten, 180 Wis. 2d at 288. The court of appeals decision was based principally upon the following facts: (a) the Walther firm made joint appearances on behalf of Marten and Hartford; (b) the Walther firm gave legal advice to both Marten and Hartford regarding the merits of claims brought against them; (c) the Walther firm negotiated settlements on claims brought against Marten and Hartford; (d) the Walther firm represented to third parties and claimants that it served as counsel for Marten and Hartford; and (e) Hartford had a financial interest in every worker's compensation claim brought against Marten.

[13]*13For the reasons set forth below, this court now reverses the decision of the court of appeals.

II.

Circuit courts possess "broad discretion" in determining whether an attorney should be disqualified in a given case. Motions to disqualify are reviewed under the erroneous exercise of discretion standard, and, accordingly, the scope of appellate review is limited. Jesse v. Danforth, 169 Wis. 2d 229, 245-46, 485 N.W.2d 63 (1992). The court will reverse a discretionary decision of the circuit court when the exercise of discretion is based on an error of law. Id. at 246. Where the record shows that the court looked to and considered the facts of the case and reasoned its way to a conclusion that is consistent with applicable law and one a reasonable, judge could reach, the court will affirm the decision even if it is not one with which we ourselves would agree. Shuput v. Lauer, 109 Wis. 2d 164, 177-78, 325 N.W.2d 321 (1982); Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 (1981); McCleary v. State, 49 Wis. 2d 263, 277, 182 N.W.2d 512 (1971).

It is agreed that the Walther firm is the attorney for Marten. The relationship of attorney and client is one of agency. Security Bank v. Klicker, 142 Wis. 2d 289, 295, 418 N.W.2d 27 (Ct. App. 1987).4 The Restatement (Second) of Agency § 1(1) (1958) defines "agency" as "the fiduciary relation which results from the manifestation of consent by one person to another that the [14]*14other shall act on his behalf and subject to his control, and consent by the other so to act."

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Marten Transport, Ltd. v. Hartford Specialty Co.
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Bluebook (online)
533 N.W.2d 452, 194 Wis. 2d 1, 1995 Wisc. LEXIS 81, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marten-transport-ltd-v-hartford-specialty-co-wis-1995.