Ash Park, LLC v. Alexander & Bishop, Ltd.

• Decision Date: 07 April 2009
• Docket Number: No. 2008AP1735.,2008AP1735.
• Citation: 2009 WI App 71,767 N.W.2d 614
• Parties: ASH PARK, LLC, A Wisconsin Limited Liability Company, Plaintiff-Respondent, v. ALEXANDER & BISHOP, LTD., A Wisconsin Corporation<SMALL><SUP>&#x2020;</SUP></SMALL>, Defendant-Appellant.
• Court: Wisconsin Court of Appeals

767 N.W.2d 614

2009 WI App 71

ASH PARK, LLC, A Wisconsin Limited Liability Company, Plaintiff-Respondent, v. ALEXANDER & BISHOP, LTD., A Wisconsin Corporation^†, Defendant-Appellant.

No. 2008AP1735.

Court of Appeals of Wisconsin.

Submitted on Briefs January 27, 2009.

Opinion Filed April 7, 2009.

On behalf of the defendant-appellant, the cause was submitted on the briefs of Valerie L. Bailey-Rihn of Quarles & Brady LLP, Madison.

On behalf of the plaintiff-respondent, the cause was submitted on the brief of R. George Burnett and Patrick M. Blaney of Liebmann, Conway, Olejniczak, & Jerry, S.C., Green Bay.

Before HOOVER, P.J., PETERSON and BRUNNER, JJ.

¶ 1 HOOVER, P.J

Alexander & Bishop, Ltd., appeals a summary judgment ordering specific performance of a real estate purchase contract. Alexander & Bishop, the proposed purchaser, argues (1) it was inappropriate to grant specific performance as a remedy; (2) there were disputed facts precluding summary judgment; (3) the circuit court should have granted its motion for reconsideration or relief under WIS. STAT. § 806.07;¹ and (4) pre-and postjudgment interest was erroneously calculated based on the purchase price. We reject Alexander & Bishop's arguments and affirm the judgment and order.

BACKGROUND

¶ 2 Alexander & Bishop contracted to purchase vacant land from Ash Park, LLC, for $6.3 million to develop as commercial property. The accepted offer contained a leasing contingency that allowed Alexander & Bishop to terminate the contract and receive a refund of its $50,000 earnest payment if it could not secure an anchor tenant. The contingency had to be invoked no later than July 20, 2007. Alexander & Bishop could also opt to twice extend the contingency for two-month periods by paying a nonrefundable $25,000 extension fee each time. The extension provision clarified that the periods would end on September 20 and November 20, 2007. Closing was to occur by December 14, 2007.

¶ 3 Alexander & Bishop invoked the leasing contingency in writing on July 20. Rather than requesting a refund, on August 1 Alexander & Bishop executed an agreement to reinstate the contract. The reinstatement agreement made the original $50,000 earnest money nonrefundable and required Alexander & Bishop to deposit a nonrefundable $25,000 extension fee with the escrow agent. Both payments would be applied to the purchase price at closing. The agreement reinstated the contract on its original terms, except as specifically stated, and did not address the length of the extension period. Finally, the reinstatement agreement clarified that the sale included an assignment of an option to purchase an adjacent property.

¶ 4 On October 9, Alexander & Bishop verbally informed Ash Park that the intended anchor tenant had decided to suspend all store relocations and would therefore not be interested in leasing the property until at least sometime in 2008. Ash Park responded with a letter indicating its willingness to explore options for a new agreement, but threatening the possibility of an action for specific performance. The parties were unable to negotiate a new agreement and Ash Park informed Alexander & Bishop it would prepare for the December 14, 2007 closing.

¶ 5 The sale failed to close and Ash Park sued Alexander & Bishop. The circuit court granted summary judgment ordering specific performance. The court also awarded Ash Park pre-and postjudgment interest. The court subsequently denied Alexander & Bishop's motion for reconsideration or relief from judgment. Alexander & Bishop appeals.

DISCUSSION

I. Specific Performance

¶ 6 Alexander & Bishop first argues the circuit court erroneously exercised its discretion by awarding specific performance as a remedy. The parties executed the Wisconsin Department of Regulation and Licensing's standard form contract, WB-13 Vacant Land Offer to Purchase, which states:

If Buyer defaults, Seller may:

(1) sue for specific performance and request the earnest money as partial payment of the purchase price; or

(2) terminate the Offer and have the option to: (a) request the earnest money as liquidated damages; or (b) direct Broker to return the earnest money and have the option to sue for actual damages.

¶ 7 This contract language aside, Alexander & Bishop argues Ash Park, as the property vendor, had an adequate remedy at law for money damages and is therefore not entitled to the equitable remedy of specific performance. Only one of the four cases Alexander & Bishop cites, Henrikson v. Henrikson, 143 Wis. 314, 127 N.W. 962 (1910), entailed a property transaction. Henrikson is factually distinct, involving a purchaser who requested specific performance of an oral contract where the purchaser had partially performed. Regardless, any general support for Alexander & Bishop's argument found in Henrikson is superseded by specific authority from other cases.

¶ 8 In Heins v. Thompson & Flieth Lumber Company, 165 Wis. 563, 571, 163 N.W. 173 (1917), the court observed that the purchaser in a real property transaction could compel specific performance, and held "[t]he right of the vendor, in such case, may be likewise enforced. Their rights are mutual as to remedies." Even then, the rule was well established in Wisconsin. See Kipp v. Laun, 146 Wis. 591, 602, 131 N.W. 418 (1911) ("[T]he rule exists that specific performance may be had at the suit of the vendor of land wherein the vendee is decreed to accept the deed and pay the purchase price."); Curtis Land & Loan Co. v. Interior Land Co., 137 Wis. 341, 346, 118 N.W. 853 (1908); Gates v. Parmly, 93 Wis. 294, 306, 66 N.W. 253 (1896) ("[T]he vendor may also, by a similar equitable action, enforce the undertaking of the vendee, although the substantial part of his relief is the recovery of money.").

¶ 9 Additionally, our supreme court has consistently rejected the contention that a property vendor may not seek specific performance if it has an adequate remedy at law available. See Dells Paper & Pulp Co. v. Willow River Lumber Co., 170 Wis. 19, 33, 173 N.W. 317 (1919) (citing Heins, 165 Wis. at 573, 163 N.W. 173) (recognizing the unique "principles applicable to a contract for the sale of lands"); Kipp, 146 Wis. at 602, 131 N.W. 418; Curtis Land & Loan, 137 Wis. at 345, 118 N.W. 853. Although the courts have not recently addressed this argument, we have recognized a vendor's right to sue for specific performance, without suggesting there must be no adequate remedy at law. See Yee v. Giuffre, 176 Wis.2d 189, 194 n. 3, 499 N.W.2d 926 (Ct. App.1993) ("Both parties agree that Wisconsin courts recognize that an action for specific performance is among the alternative remedies that may be chosen by a seller...."); Moritz v. Broadfoot, 35 Wis.2d 343, 151 N.W.2d 142 (1967) (affirming the trial court's order for specific performance). Further, WIS. STAT. § 840.03 lists "specific performance of contract" as one of the numerous remedies that may be pursued in a real property action, singly or in combination, "unless the use of a remedy is denied in a specified situation."

¶ 10 Moreover, a circuit court has very little discretion to deny a vendor's request for specific performance. "The parties being competent to contract, and having made an agreement reasonably certain in all its parts, and not objectionable for unfairness or inequity, there is no room for ... judicial discretion as to whether it should be specifically performed. Such performance is a matter of right." Heins, 165 Wis. at 573, 163 N.W. 173. This rule was reaffirmed and quoted in Anderson v Onsager, 155 Wis.2d 504, 513, 455 N.W.2d 885 (1990), albeit in an action by a purchaser against the vendor. There, the court ruled "specific performance of a contract to sell land should be ordered as a matter of course," unless doing so would be "unfair, unreasonable, or impossible." Id. at 512-13, 455 N.W.2d 885. In light of the foregoing, we reject the argument that Ash Park, as the property vendor, was precluded from obtaining specific performance because it was required to pursue a remedy at law for damages. See generally, 12 ARTHUR L. CORBIN, CORBIN ON CONTRACTS § 1145, at 215-20 (interim ed.2002).

¶ 11 Alexander & Bishop also argues specific performance is an inappropriate remedy because it is unable to pay. Ash Park responds that Alexander & Bishop did not assert an inability to pay during the summary judgment proceedings. The only evidence that Alexander & Bishop cites is a self-serving affidavit by its principal, submitted two months after the summary judgment hearing, in opposition to Ash Park's contempt motion.² That affidavit merely asserts Alexander & Bishop cannot obtain financing without a tenant. Alexander & Bishop cites to no evidence of its financial resources or any evidence it applied for and was denied financing. When a party fails to raise an issue of fact at the summary judgment proceedings, they may not do so on appeal. See Leuchtenberg v. Hoeschler, 271 Wis. 151, 158-59, 72 N.W.2d 758 (1955); see also Roseliep v. Herro, 206 Wis. 256, 264, 239 N.W. 413 (1931). Further, the circuit court implicitly concluded Alexander & Bishop had the ability to pay in its oral decision ordering specific performance.

¶ 12 Alexander & Bishop alternatively argues that if specific performance is ordered against a purchaser, then the actual remedy is an order for judicial sale. Alexander & Bishop's argument, however, relies primarily on cases involving land contracts where the purchaser was in possession of the property. In Kallenbach v. Lake Publ'ns, Inc., 30 Wis.2d 647, 142 N.W.2d 212 (1966), the court discussed the various remedies available to a land contract vendor. In addressing specific performance, the court stated, "Under this remedy the vendor elects to affirm the contract by having the property auctioned at judicial sale." Id. at 651, 142 N.W.2d 212.

¶ 13 Notably, this sentence was quoted in Moritz, which involved a property vendor's action for specific...