Brentwood Condo LLC v. Walstead, Appeal No. 2010AP574
| Decision Date | 24 November 2010 |
| Docket Number | Cir. Ct. No. 2008CV4143,Appeal No. 2010AP574 |
| Parties | Brentwood Condo, LLC, Plaintiff-Respondent-Cross-Appellant, v. Nelson C. Walstead, Defendant-Third-Party Plaintiff-Appellant- Cross-Respondent, v. Gordon R. Becker, Third-Party Defendant-Respondent-Cross-Appellant, American Family Insurance, Intervenor. |
| Court | Wisconsin Court of Appeals |
notice
This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports.
A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62.
APPEAL and CROSS-APPEAL from a judgment and an order of the circuit court for Dane County: SARAH B. O'BRIEN, Judge. Affirmed.
Before Vergeront, P.J., Higginbotham and Blanchard, JJ.
¶1 VERGERONT, P.J. Nelson Walstead purchased rental property from Brentwood Condo, LLC, with a loan secured in part by a mortgage on Walstead's personal residence. When Walstead failed to comply with certain terms of the mortgage and note, Brentwood initiated this foreclosure action. Walstead asserted affirmative defenses and filed a counterclaim against Brentwood and third-party claims against Gordon Becker, who had been involved in work on the property. The circuit court granted summary judgment in favor of Brentwood on the foreclosure and the counterclaim and in favor of Becker on the third-party claims. Walstead appeals. For the reasons we explain below, we affirm the circuit court's grant of summary judgment in favor of Brentwood and Becker. On their cross-appeal, we affirm the circuit court's denial of their motion for attorney fees.
¶2 The following facts are undisputed. In July 2006 Nicole Evans, Walstead's stepdaughter, became interested in purchasing rental property owned and managed by Brentwood. Becker, the contractor who had supervised the repair and remodeling work on the property, gave Evans a tour of the property. After this tour, Becker agreed to act as Evans' agent in drafting an offer to purchase. Evans executed a document acknowledging that Becker was the agent for Brentwood, that he was the father of Laura Morris, who owned the property through Brentwood, and that she, Evans, understood and agreed that Becker had a "duo-agency in this transaction." Evans signed the offer to purchase drafted by Becker but was unable to obtain adequate financing. In order to close on the property, she involved Walstead in the transaction. Walstead did not personally view the property, instead receiving information about the property from Evans.
¶3 Walstead signed an offer to purchase the property in August 2006. This purchase was partially financed by a loan from Brentwood, secured in part by a second mortgage on Walstead's personal residence. This mortgage requires Walstead to pay all taxes when due and to obtain Brentwood's written permission prior to transferring an ownership interest in the property. Without Brentwood's written permission, Walstead transferred ownership of the property to 2413 Brentwood LLC (2413 LLC), a company he formed. He and Evans were the only members. Walstead also failed to pay the 2007 real estate taxes when due. In July 2008, Brentwood notified Walstead that these actions constituted defaults under the mortgage and note, and, as a result of these defaults, the entire amount of the note was immediately due and payable.
¶4 Shortly after sending the notice of default, Brentwood commenced this action seeking foreclosure and sale of Walstead's residence. In his responsive pleading, Walstead asserted an affirmative defense of estoppel, based on the allegation that the Brentwood members were aware at the time of closing of his intention to transfer title to an LLC that would include Evans. He also asserted an affirmative defense of unclean hands. In addition, he filed a counterclaim of misrepresentation against Brentwood and third-party claims of misrepresentation and breach of fiduciary duty against Becker. The unclean hands defense, like the misrepresentation claims against Brentwood and Becker, were founded on allegations of misrepresentation with respect to seepage and flooding damage in the basement. Based on his defenses and claims, Walstead demanded dismissal of the foreclosure action and rescission of the purchase contract.
¶5 Brentwood and Becker filed a motion for judgment on the pleadings, requesting that the court grant a judgment of foreclosure to Brentwood and dismiss Walstead's counterclaim and third-party claims. On Walstead's motion, the court converted that motion to a motion for summary judgment and all parties filed affidavits. Walstead also moved to amend his responsive pleading, and the circuit court granted this motion. Walstead's amended pleading added more allegations regarding the alleged misrepresentation but was otherwise the same.
¶6 The circuit court granted summary judgment in favor of Brentwood on the foreclosure and the counterclaim and granted summary judgment in favor of Becker on the third-party claims.
¶7 Walstead filed a motion for reconsideration and attached additional affidavits. In their response to this motion, Brentwood and Becker moved for attorney fees and other expenses as a sanction pursuant to WIS. STAT. § 802.05(3) (2007-08), 1 alleging violations of § 802.05(2)(b) and (c). The circuit court denied Walstead's motion for reconsideration and denied the motion for attorney fees.
¶8 Walstead appeals the order and judgment from the circuit court's original decision and the order denying his motion for reconsideration. Brentwood and Becker cross-appeal the court's denial of their motion for sanctions.
¶9 On appeal Walstead challenges both the denial of his motion for reconsideration and the grant of summary judgment ordering foreclosure and dismissing his counterclaim and third-party claims. With respect to the motion for reconsideration, he contends the circuit court erred because it refused to consider the new affidavits he submitted with that motion and refused to consider his argument that Becker violated his duties under WIS. ADMIN. CODE § RL 24.07(2). With respect to the summary judgment motion, he contends there are disputed issues of fact regarding his defenses to the foreclosure and his claims against Brentwood and Becker.
¶10 In opposition to the converted summary judgment motion, Walstead submitted an affidavit from Evans. In his motion for reconsideration, he submitted a second affidavit from Evans, his own affidavit, and affidavits from two former residents of the property and a licensed professional engineer. These addressed the condition of the basement. The circuit court declined to consider the new affidavits because they did not contain newly discovered evidence and could have been submitted before the court issued its decision on summary judgment.
¶11 To prevail on a motion for reconsideration, the movant must present either newly discovered evidence or establish a manifest error of law or fact. Koepsell's Olde Popcorn Wagons, Inc. v. Koepsell's Festival Popcorn Wagons, Ltd., 2004 WI App 129, ¶44, 275 Wis. 2d 397, 685 N.W.2d 853 (citation omitted). "[A] motion for reconsideration is not a vehicle for making new arguments orsubmitting new evidentiary materials after the court has decided a motion for summary judgment." Lynch v. Crossroads Counseling Ctr, Inc., 2004 WI App 114, ¶23, 275 Wis. 2d 171, 684 N.W.2d 141. "A party may not use a motion for reconsideration to introduce new evidence that could have been introduced at the original summary judgment phase." Koepsell's, 275 Wis. 2d 397, ¶46.
¶12 We review a circuit court's decision on a motion for reconsideration under the erroneous exercise of discretion standard. Koepsell's, 275 Wis. 2d 397, 16. A circuit court properly exercises its discretion if it examines the relevant facts, applies the correct legal standard, and employs a demonstrated rational process to reach a reasonable conclusion. See Borreson v. Yunto, 2006 WI App 63, ¶6, 292 Wis. 2d 231, 713 N.W.2d 656.
¶13 Walstead concedes on appeal that the additional affidavits he submitted with his motion for reconsideration do not contain newly discovered evidence. He contends they were submitted to buttress Evans' first affidavit, which the court had considered insufficient to entitle Walstead to a trial. This argument is inadequate to show that the court erroneously exercised its discretion in not considering the new affidavits. Accordingly, in addressing Walstead's challenges to the summary judgment, we consider only Evans' first affidavit.
¶14 For the first time in his motion for reconsideration Walstead argued that Becker breached his duty as a realtor to disclose material adverse facts as required by WIS. ADMIN. CODE § RL 42.07(2). The court did not address this issue and Walstead claims this was error. Walstead does not explain why the circuit court erroneously exercised its discretion in declining to consider this new argument. He provides no explanation why he could not have raised this issue before the court ruled on the summary judgment motion. We conclude the circuitcourt properly exercised its discretion in declining to consider this new argument, and we do not discuss it further.
¶15 We review de novo the grant of summary judgment, employing the same methodology as the circuit court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 314-16, 401 N.W.2d 816 (1987). A party is entitled to summary judgment when there are no genuine issues of material fact and that party is entitled to judgment as a matter of law. WIS. STAT. § 802.08(2).
¶16 We first examine the complaint to determine whether a claim for relief has been stated. Hoida, Inc. v. M&IMidstate Bank, 2006 WI 69, ¶16, 291 Wis. 2d 283, 717 N.W.2d 17. If it does and if the answer is sufficient to join issue, we examine the moving part...
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