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COURT OF APPEALS
NOTICE
DECISION
DATED AND FILED                                                                           This opinion is subject to further editing.   If
published, the official version will appear in
the bound volume of the Official Reports.
August 3, 2004
A party may file with the Supreme Court a
                                                                                          Cornelia G. Clark                                                    petition to review an adverse decision by the
                                                                                          Clerk of Court of Appeals                                            Court of Appeals.   See WIS. STAT. § 808.10
                                                                                                                                                               and RULE 809.62.
                                                                                                                                                               Cir. Ct. No.   02SC005200
Appeal No.                                                                                04-0312
STATE OF WISCONSIN                                                                                                                                             IN COURT OF APPEALS
DISTRICT III
JOHN P. ZAKOWSKI FOR THE STATE DEPARTMENT OF
WORKFORCE DEVELOPMENT EX REL WAYNE M. VANDEN
AVOND,
PLAINTIFF-RESPONDENT,
V.
CWA TRANSPORT, INC.,
DEFENDANT-APPELLANT.
APPEAL from a judgment of the circuit court for Brown County:
KENDALL M. KELLEY, Judge.   Affirmed and cause remanded.
¶1                                                                                        CANE, C.J.1    This case centers on a wage claim.   CWA Transport,
Inc.,  appeals  a  judgment  entered  in  favor  of  Wayne  M.  Vanden  Avond  for
1   This  appeal  is  decided  by  one  judge  pursuant  to  WIS.  STAT.                  § 752.31(2).    All
references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.




No.   04-0312
withheld severance pay.   CWA argues the trial court erred by (1) concluding that
the payment CWA promised to Vanden Avond was severance pay, as opposed to
simply being a gratuitous promise, (2) adding a 50% penalty to the unpaid wages,
and                                                                                   (3)  awarding  Vanden  Avond  reasonable  attorney  fees.    We  affirm  the
judgment and remand the matter to the trial court for a determination of reasonable
attorney fees incurred in relation to this appeal.
¶2                                                                                    On Monday, June  3,  2002, CWA’s managers terminated Vanden
Avond’s employment.   Either during that conversation or immediately afterward,
CWA indicated it would pay Vanden Avond five days’ pay, the remainder of the
pay period.   Shortly thereafter, Vanden Avond returned his uniform and various
holiday gifts he received during his employment.   Due to what CWA characterizes
as  this                                                                              “insulting  gesture,”  CWA  decided  not  to  pay  Vanden  Avond  for  the
remainder of the week.
¶3                                                                                    The Department of Workforce Development initiated a small claims
action on Vanden Avond’s behalf against CWA for unpaid wages.   In addition to
seeking the five days’ pay CWA extended to Vanden Avond, Vanden Avond
claimed he was entitled to nine days’ vacation pay as well as a 50% unpaid wage
penalty.   See WIS. STAT. § 109.11(2).   The court commissioner later dismissed the
action,  and  Vanden  Avond  filed  a  demand  for  a  trial.     See  WIS.  STAT.
§ 799.207(5).
¶4                                                                                    After  a  court trial,  the  court found that Vanden Avond  was not
entitled to vacation pay and actually had received one extra day of vacation pay.
The court also found that the five days’ pay CWA extended to Vanden Avond was
not  merely  a  gratuitous  promise,  as  CWA  claimed,  but  was  severance  pay.
Because CWA overpaid Vanden Avond one day of vacation pay, the court found
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No.   04-0312
he was entitled to four days’ severance pay, or $584.60.   Pursuant to WIS. STAT.
§ 109.11(2), the court imposed a 50% penalty for the unpaid wages, resulting in an
additional  $292.30.   The court also awarded Vanden Avond  $140 in costs and
$3,853.75 in reasonable attorney fees.   The court later denied CWA’s motion for
reconsideration.   CWA appeals.
¶5                                                                                     CWA  argues  the  compensation  Vanden  Avond  claimed  was  not
“wages.”    It  notes  that  WIS.  STAT.  § 109.01(3)  defines  “wages”  as  meaning
“remuneration  payable  to  an  employee  for  personal  services.”     Although
§ 109.01(3) proceeds to list  “severance pay” as an example of a wage, CWA
argues that Vanden Avond could not have received severance pay because it was
not tied to any personal services Vanden Avond rendered during that week.   In
CWA’s estimation, what the court found to be severance pay was nothing more
than a gratuitous promise to pay Vanden Avond for the remainder of the week.
¶6                                                                                     We agree with CWA to the extent that it submits that remuneration
payable to an employee for personal services is “the touchstone” for determining
whether a payment constitutes a wage.   See DILHR v. Coatings, Inc., 126 Wis. 2d
338,                                                                                   344-45,                                                                        376  N.W.2d  834  (1985).    However,  we  disagree  with  CWA’s
contention that Vanden Avond could not have received a wage during the four
days after he was terminated because he did not provide personal services during
that time.   WISCONSIN STAT. § 109.01(3) specifically characterizes severance pay
as a wage.   In Compton v. Shopko Stores, Inc., 93 Wis. 2d 613, 623, 287 N.W.2d
720                                                                                    (1980),  the  supreme  court  characterized  severance  pay  as  a  form  of
compensation for the termination of employment that is compensation for past
services.
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No.   04-0312
¶7                                                                                                   Because severance pay is remuneration for past personal services,
Vanden Avond need not have provided CWA additional personal services after
CWA terminated his employment in order for him to obtain a severance pay wage.
See id.    Thus, CWA’s argument essentially is a challenge to the trial court’s
finding that the compensation CWA extended Vanden Avond was severance pay.
Upon reviewing the record, we conclude the finding is not clearly erroneous.   See
WIS. STAT. § 805.17(2).2
¶8                                                                                                   CWA next argues the trial court erred by imposing a 50% penalty
for unpaid wages under WIS. STAT. § 109.11(2).   We disagree.
¶9                                                                                                   Whether  the  employer  should  be  penalized  under  WIS.  STAT.
§ 109.11(2) is addressed to the trial court’s discretion.    See id.    A trial court
properly exercises its discretion when it applies the appropriate legal standard to
the facts of record and, using a logical reasoning process, draws a conclusion that
a reasonable judge could reach.   Stan’s Lumber, Inc. v. Fleming, 196 Wis. 2d
554, 572, 538 N.W.2d 849 (Ct. App. 1995).   As CWA correctly mentions, not all
employer conduct is subject to the civil penalty contained in  § 109.11(2).   See
American Fed’n of State, Local 1901 v. Brown County, 140 Wis. 2d 850, 854-56,
2    CWA does not squarely frame its appeal to challenge the court’s finding that Vanden
Avond received severance pay.   However, in connection with its other arguments, insofar as
CWA contends Vanden Avond could not have received severance pay because CWA does not
have a written policy for awarding severance pay, we note that severance pay can stem from an
oral agreement.   See Markusen v. General Aniline & Film Corp.,  16 F.R.D.  455,  457 n.2
(S.D.N.Y. 1954).      Also, to the extent that CWA contends Vanden Avond is not entitled to
additional compensation because he was an ex-employee at the time CWA agreed to pay Vanden
Avond  one  week’s  pay,  the  record  contains  competing  factual  assertions  as  to  when  the
agreement was made, be it during the conversation in which CWA terminated Vanden Avond or
afterwards.   However, even if CWA made the agreement after it fired Vanden Avond, because
severance pay is compensation for past personal services, the timing of the agreement would not
upset a finding that Vanden Avond was entitled to the wage.
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No.   04-0312
412 N.W.2d 167 (Ct. App. 1987), aff’d, 146 Wis. 2d 728, 432 N.W.2d 571 (1988).
Only the wrongful withholding of wages for dilatory or other unjust reason should
be penalized.   See id.
¶10    CWA  claims  its  failure  to  pay  was  not  predicated  on  wrongful
behavior, obstinacy or bad faith, but rather resulted from CWA’s honest belief that
Vanden Avond was not entitled to the compensation CWA previously offered.
However, in its appellate brief, CWA concedes it refused to pay Vanden Avond
the  severance  pay  after  CWA’s  managers  were  personally  hurt  after  Vanden
Avond returned some holiday gifts he received during his employment.   CWA
characterizes   Vanden   Avond’s   actions   as                                           “an   insulting   gesture”   and
correspondingly  decided  not  to  pay  Vanden  Avond.     In  light  of  these
circumstances,  the  trial  court  did  not  erroneously  exercise  its  discretion  by
imposing a 50% penalty on CWA for failure to pay Vanden Avond’s severance
wage.
¶11    Finally,  CWA  claims  the  trial  court  erred  by  awarding  Vanden
Avond nearly $3,953.75 in attorney fees.   We disagree.
¶12    If an employee is a prevailing party in a wage claim, the trial court
may award attorney fees.   See WIS. STAT. § 109.03(6);   Jacobson v. American
Tool Cos., 222 Wis. 2d 384, 402, 588 N.W.2d 67 (Ct. App. 1998).   We defer to
the  trial  court’s  attorney  fee  determination  because  it  has  the                  “advantageous
position  to  observe  the  amount  and  quality  of  work  performed  and  has  the
expertise to evaluate the reasonableness of the fees.”   Allied Processors, Inc. v.
Western Nat’l Mut. Ins. Co.,  2001 WI App  129,  ¶46,  246 Wis.  2d  579,  629
N.W.2d  329.    We  will  sustain  the  award  unless  the  trial  court  erroneously
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No.   04-0312
exercised its discretion.   Beaudette v. Eau Claire County Sheriff's Dep’t, 2003
WI App 153, ¶31, 265 Wis. 2d 744, 668 N.W.2d 133.
¶13    First, Vanden Avond was a prevailing party.   A prevailing party is
one who “succeeds on any significant issue in litigation which achieves some of
the benefit sought by bringing suit.”   Footville State Bank v. Harvell, 146 Wis. 2d
524,  539-40,  432 N.W.2d  122  (Ct. App.  1988)  (defining  “prevailing party” in
Wisconsin Consumer Act context).3   Here, Vanden Avond succeeded on his wage
claim.
¶14    Second,  as  to  whether  attorney fees  should  even  be  awarded  to
Vanden Avond as the prevailing party, the court heard evidence, over Vanden
Avond’s objection, of CWA’s attempt to settle the case for slightly more than
Vandon Avond ultimately received.    However, it concluded that attorney fees
were still appropriate.   This was a reasonable exercise of discretion.   The purpose
of WIS. STAT. ch. 109 is to ensure employees receive their wages to prevent harm
to themselves and their families.   Jacobson, 222 Wis. 2d at 400-01.   If Vanden
Avond were not awarded attorney fees, he would be forced to pay the fees out of
his pocket and, thus, would not receive the full wages to which he was entitled.
See id.   Consequently, even assuming the settlement negotiations are somehow
relevant, it was reasonable for the trial court to award Vanden Avond attorney
fees.
3  As was the case in Estate of Wheeler v. Franco, 2002 WI App 190, ¶7, 256 Wis. 2d
757, 649 N.W.2d 711, our giving meaning to “prevailing party” in a wage claim context “is
guided by case law interpreting the identical phrase under other fee-shifting statutes.”
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No.   04-0312
¶15    As to the amount, the court was concerned that Vanden Avond’s
attorney expended a significant amount of time litigating the vacation claim that
ultimately  was  unsuccessful.     However,  after  considering  Vanden  Avond’s
attorney’s itemized bill, the court found that some of the time spent on litigating
that claim was time that would inevitably have been spent on the action regardless
(such as conferences and mandatory court appearances) and that some time spent
investigating   the   claims   yielded   useful   information   for   both   claims.
Nevertheless, as to the attorney fees for the time spent prior to and up until the
conclusion of the trial, the court reduced the amount Vanden Avond sought by
half,  awarding  him  $2,643.75.    This  was  a  reasonable  exercise  of  discretion.
Noting that CWA’s post-trial posture required Vanden Avond to expend time
defending against CWA’s motions, the court also awarded Vanden Avond $1,210
in attorney fees.  This was a reasonable exercise of discretion as well.
¶16    Vanden Avond contends that he is entitled to recover additional
reasonable  attorney  fees  incurred  in  relation  to  this  appeal.    See    Chmill  v.
Friendly Ford-Mercury, 154 Wis. 2d 407, 418, 453 N.W.2d 197 (Ct. App. 1990)
(additional attorney fees in lemon-law action).   We agree and remand the matter to
the trial court for a determination as to the reasonable amount of attorney fees
Vanden Avond incurred.
By the Court.—Judgment affirmed and cause remanded.
                                                                                             This  opinion  will  not  be  published.     See  WIS.  STAT.  RULE
809.23(1)                                                                                    (b)4.
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