Chapman v. B.C. Ziegler & Co.

• Decision Date: 17 September 2013
• Docket Number: No. 2013AP282.,2013AP282.
• Citation: 839 N.W.2d 425,351 Wis.2d 123,2013 WI App 127
• Parties: Edward CHAPMAN, Plaintiff–Appellant, v. B.C. ZIEGLER AND COMPANY, Defendant–Respondent.
• Court: Wisconsin Court of Appeals

351 Wis.2d 123

839 N.W.2d 425

2013 WI App 127

Edward CHAPMAN, Plaintiff–Appellant,

v.B.C. ZIEGLER AND COMPANY, Defendant–Respondent.

No. 2013AP282.

Court of Appeals of Wisconsin.

Submitted on Briefs Sept. 3, 2013.

Opinion Filed Sept. 17, 2013.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of James P. Ginzkey, Bloomington, IL and James B. Duquette of Seymour, Kremer, Koch, Lochowicz & Duquette LLP, Elkhorn.

On behalf of the defendant-respondent, the cause was submitted on the brief of Judith A. Williams–Killackey and Jonathan W. Hackbarth of Quarles & Brady LLP, Milwaukee.

Before CURLEY, P.J., FINE and KESSLER, JJ.

FINE, J.

¶ 1 Edward Chapman appeals the order dismissing on summary judgment his breach-of-contract complaint against B.C. Ziegler and Company. His complaint sought “earned incentive compensation” that he claims he “earned in 2008” when he was a Ziegler employee. He also appeals the order denying his motion for summary judgment and his motion to amend his complaint. We affirm.

I.

¶ 2 A court must grant summary judgment to a party if “there is no genuine issue as to any material fact” and that party “is entitled to a judgment as a matter of law.” Wis. Stat. RuleE 802.08(2). We review de novo a circuit court's ruling on summary judgment, and apply the same legal principles. See Enea v. Linn, 2002 WI App 185, ¶ 11, 256 Wis.2d 714, 720, 650 N.W.2d 315, 318. Summary-judgment analysis is a two-step process. See Ibid. The first step focuses on the complaint's claim—to see whether it asserts “a proper claim for relief” and whether the answer disputes the facts that purport to underlie that claim. Ibid. If the pleadings join issue on a proper claim for relief, the second step is whether there are any genuine issues of disputed facts that are material to the complaint's claim. Ibid. Thus, a party is entitled to summary judgment if the undisputed facts require it, even though the parties may dispute some facts in the case that have no bearing on the proper summary-judgment analysis. See City of Milwaukee v. Burnette, 2001 WI App 258, ¶ 8, 248 Wis.2d 820, 834, 637 N.W.2d 447, 454 (“[A]lthough the trial court may have relied on some of the evidentiary matters presented to it by the City that are disputed by [an] affidavit, we decide this appeal only on the evidentiary record that is not disputed[.]”). Finally, we search the Record to see if the evidentiary material that the parties set out in support or in opposition to summary judgment supports reasonable inferences that require the grant or denial of summary judgment, giving every reasonable inference to the party opposing summary judgment. See Lecus v. American Mutual Insurance Co. of Boston, 81 Wis.2d 183, 189–190, 260 N.W.2d 241, 244 (1977). This case turns on the parties contract, and we also review de novo a circuit courts contract interpretation, including whether the contract is ambiguous. See Borchardt v. Wilk, 156 Wis.2d 420, 427, 456 N.W.2d 653, 656 (Ct.App.1990). Summary judgment is not appropriate when the issue turns on the terms of an ambiguous contract and the contracting parties' intent is both: (1) not clear, and (2) disputed. BV/B1, LLC v. InvestorsBank, 2010 WI App 152, ¶ 19, 330 Wis.2d 462, 472, 792 N.W.2d 622, 628. “A contract is ambiguous when its terms are reasonably susceptible to more than one interpretation.” Ibid. (emphasis added). Stated another way, “[a] contract is ambiguous ‘... (w)hen the language of a contract, considered as a whole, is reasonably or fairly susceptible to different constructions[.]’ ” Luterbach v. Mochon, Schutte, Hackworthy, Juerisson, Inc., 84 Wis.2d 1, 5, 267 N.W.2d 13, 14 (1978) (ellipses and parenthetical in original, quoted source; emphasis added). Thus, we analyze contract clauses in context, as they are reasonably understood, even if that is contrary to the parties' professed subjective intent. See Solowicz v. Forward Geneva National, LLC, 2010 WI 20, ¶ 36, 323 Wis.2d 556, 582, 780 N.W.2d 111, 124 (“Language ‘is ambiguous if it is susceptible to more than one reasonable interpretation.’ However, if the intent of the contract can be certainly ascertained from the document itself, it will be enforced. ‘By intent we do not mean the subjective intent of the drafter, but the scope and purpose of the [document] as manifest by the language used.’ ”) (quoted sources and internal citations omitted; brackets in original). Finally and critically, we must interpret contracts to avoid absurd results. See Star Direct, Inc. v. Dal Pra, 2009 WI 76, ¶ 62, 319 Wis.2d 274, 304, 767 N.W.2d 898, 913.

¶ 3 We now turn to the documents and the parties' contentions.

II.

¶ 4 As we have seen, the first step in summary-judgment analysis is whether the complaint sets out a legally cognizable claim. Chapman's complaint asserted a breach-of contract claim, and alleged that in January of 2008, he accepted Ziegler's December 27, 2007, offer of employment. The offer recited that Chapman would work for Ziegler “as Managing Director / Head of Renewable Energy” with a “tentative[ ]” start date of “Monday, February 4, 2008.” Neither party disputes that Chapman began working for Ziegler on that day. Chapman's complaint contends that Ziegler breached that contract by not paying him “earned incentive compensation” for 2008.

¶ 5 According to Chapman's complaint, he “spent his career and developed a specialty in structuring financing for the energy industry[,]” and, specifically, had a “20–year client, Environmental Power Corporation [.]” Further, the complaint says that in 2006 he “recommended [to Environmental Power Corporation] that Ziegler be retained as the investment banker for a bond offering for” Environmental Power Corporation, and that the “$60 million bond offering was successfully completed” in November of 2006. Chapman's complaint does not seek compensation from Ziegler for this matchmaking.

¶ 6 This case turns on the terms of the December 27, 2007, letter offering Chapman his Ziegler job. The letter was signed by Donald A. Carlson, Jr., whom the letter describes as “Vice Chairman and Senior Managing Director.” The letter sets out Chapman's duties with Ziegler if he accepted the offer:

As you know, you will be reporting directly to me as we start up this new line of business. We've already discussed the primary responsibilities of this position; I thought it might be helpful to “recap” our discussion as a part of this offer:

• Maintaining client relationships during deal execution, initiating new client relationships and expanding the business franchise within the renewable energy sector

• Advising on capital raising solutions for clients

• Originating, structuring, and/or executing transactions

• Preparing presentations to senior level executives and board members

• Managing, training, and mentoring team members

We pride ourselves in our associates' ability to adapt to our fast-changing environment and to “think outside the box”, so please keep in mind that the bullets noted above are simply an overview.

Chapman does not dispute that, as Carlson testified at his deposition, Chapman “did not have any other bankers reporting to him.”

¶ 7 The crux of the summary-judgment dispute is the December 27, 2007, letter's description of what it termed “Your Compensation.” (Bolding omitted.) This part of the letter has two parts: Chapman's “Base Draw” and his “Incentive Compensation.” (Underlining omitted.) We quote these provisions, as material:

Base Draw

An annual base draw of $175,000 will be paid to you on a semi-monthly basis (the 15th and the last business day of the month).

Incentive Compensation

You will be eligible to earn incentive compensation based on 1) the renewable energy practice's revenue, 2) overall financial success of capital markets and 3) overall financial success of the firm. Please review the following structure and example:

• Revenues less direct expenses times a performance adjusted percentage (approximately 30–35%)

• The banker's base draw is netted from this amount

• The remainder equals incentive compensation

Revenues less direct expenses

$1,000,000

Performance percentage

30%

Gross Compensation

$ 300,000

Less Base Draw

$ 175,000

Incentive Compensation

$ 125,000

A couple of notes to keep in mind:

• Our incentive compensation is paid in February following the performance year.

• Your performance will be reviewed at least annually, generally at year-end.

¶ 8 Chapman's complaint alleged: “Primarily through [Chapman]'s efforts, in 2008 Ziegler's renewable energy department completed three financings from which Ziegler's revenues less direct expenses totaled $1,366,000[,]” and that two of those financings were with Environmental Power Corporation. The complaint claimed that Chapman's “earned incentive compensation on that $1,366,000 ranged from $189,800 at 30% to $258,100 at 35%.” The complaint claimed damages within that range.¹ As material to this appeal, Ziegler's answer admitted that “in 2008 Ziegler's renewable energy department completed three financings from which Ziegler's revenues less direct expenses totaled $1,366,000” but denied that “these occurred primarily through [Chapman]'s efforts.”

¶ 9 The summary-judgment Record reveals that the three financings were deals for: (1) Environmental Power Corporation in connection with California; (2) Environmental Power Corporation in connection with Nebraska; and (3) Homeland Renewable Energy. Chapman does not dispute this. Carlson's affidavit avers that the “total revenue, less direct expenses, generated from” the latter “two deals was $359,000.” Chapman does not dispute this either. He also does not dispute the avermentin Carlson's affidavit that if Ziegler applied “the approximate incentive compensation range of 30–35% in 2008” and also credited Chapman with the “entire revenue” Ziegler received for those latter two deals (Environmental Power Corporation Nebraska, and Homeland Renewable Energy), “the $359,000 in revenue, less direct...