Dickman v. Vollmer

• Decision Date: 09 May 2007
• Docket Number: No. 2006AP542.,2006AP542.
• Citation: 736 N.W.2d 202,2007 WI App 141
• Parties: Daniel DICKMAN, Plaintiff-Appellant-Cross-Respondent, v. Ted K. VOLLMER and Mixair Technologies, Inc., Defendants-Respondents-Cross-Appellants.
• Court: Wisconsin Court of Appeals

736 N.W.2d 202

2007 WI App 141

Daniel DICKMAN, Plaintiff-Appellant-Cross-Respondent, v. Ted K. VOLLMER and Mixair Technologies, Inc., Defendants-Respondents-Cross-Appellants.

No. 2006AP542.

Court of Appeals of Wisconsin.

Submitted on Briefs March 5, 2007.

Opinion Filed May 9, 2007.

On behalf of the plaintiff-appellant-cross-respondent, the cause was submitted on the briefs of Roberta N. Puntillo, of Godin, Geraghty & Puntillo, S.C. of Kenosha.

On behalf of the defendant-respondent-cross-appellant, Ted K. Vollmer, the cause was submitted on the briefs of Terry E. Nilles, of von Briesen & Roper, S.C., of Milwaukee. On behalf of the defendant-respondent-cross-appellant, Mixair Technologies, Inc., the cause was submitted on the briefs of Charles P. Magyera, of Gonzalez, Saggio & Harlan, L.L.P., of Milwaukee.

Before SNYDER, P.J., NETTESHEIM and ANDERSON, JJ.

¶ 1 NETTESHEIM, J

This case began as an action for dissolution of a corporation. Daniel Dickman appeals the judgment dismissing his complaint against Ted Vollmer and MixAir Technologies, Inc., the corporation Dickman and Vollmer founded. Claiming that Vollmer controlled MixAir in an illegal, oppressive and fraudulent manner, Dickman sought to dissolve MixAir and to have himself appointed as receiver for winding up its affairs.

¶ 2 The trial court concluded that Dickman was not entitled to have MixAir judicially dissolved and dismissed his complaint. It also dismissed Vollmer's and MixAir's counterclaims against Dickman for breach of fiduciary duty, breach of contract, conversion and for an accounting, and declared that Vollmer likewise had breached no fiduciary obligations. Finally, the court ordered specific performance of a patent assignment to MixAir that it found the parties had orally agreed to.

¶ 3 The main issue on appeal is whether a written agreement between the parties covers the assignment to MixAir of their jointly held patent.¹ We uphold the trial court's findings that the parties orally agreed to assign the patent, however, and therefore affirm the judgment enforcing the assignment. We also affirm the dismissal of Dickman's complaint. Accordingly, we need not address Vollmer's and MixAir's "protective" cross-appeal, in which they ask us to reverse the trial court's holding that Dickman was not in breach of the written agreement and to remand that issue for further determination.

¶ 4 Finally, we commend the trial court on its thorough decision. Embraced within its thirty-nine pages are 141 findings of fact. We incorporate and adopt the trial court's decision on all issues we do not address. See WIS.CT.APP. IOP VI(5)(a) (Nov. 1, 2006) (court of appeals may adopt trial court's written opinion).

BACKGROUND

¶ 5 Dickman and Vollmer jointly invented a new type of "diffuser," a device to aerate and purify ponds. In 1997, they applied for a patent and entered into a written agreement on sharing (1) patent fees; (2) expenses related to the diffuser's development, manufacture, sales and marketing; and (3) profits.² The agreement provided that changes to it had to be in writing and approved by both parties. It did not address an assignment of a patent and no later writing modified the agreement. As agreed, Vollmer paid the first $2000 in patent fees.

¶ 6 In April 1998, Dickman and Vollmer incorporated MixAir to more effectively market and sell the diffuser without competing with each other. Vollmer and his family members and Dickman split MixAir's voting stock equally two ways.³ Dickman owns Recyclemate, Inc., and In Situ Solutions, Inc.; Vollmer and his family own several other companies, among them Great Lakes Bio Systems. The 1997 agreement had granted Recyclemate and Bio Systems a permanent license to manufacture, market and sell the diffuser. The plan was for the diffuser to be manufactured by Recyclemate, sold to MixAir at near cost, and marketed by Bio Systems and In Situ as MixAir distributors under a favorable pricing structure called "principal pricing."

¶ 7 In 2001, a patent on the diffuser was issued jointly to Dickman and Vollmer. Vollmer maintains that when MixAir was incorporated, he and Dickman orally agreed that MixAir would "end[ ] up with the patent" on the diffuser, but nothing ever was reduced to writing because they had a good relationship. Vollmer testified that they agreed to the eventual assignment in return for shares of voting stock and MixAir's agreement to fund continued prosecution of the patent and to pay Dickman and Vollmer royalties of five percent of the proceeds from diffuser sales. Ron Brockman, their patent attorney, testified that he had had no patent assignment discussions with either Dickman or Vollmer and was unaware of an assignment. Dickman denies agreeing to assign the patent, but acknowledged the royalty agreement. Dickman also "[did not] have a problem with MixAir having paid" $30,243 of the total $40,167 in patent fees, while he and Vollmer paid approximately $2500 and $7300, respectively. Dickman contributed no equity capital to MixAir apart from the assignment agreement that he now disputes.

¶ 8 Although Dickman denies assigning or agreeing to assign the patent, he admits signing distributor agreements on MixAir's behalf indicating that MixAir owned patents and other intellectual property. Also, Vollmer and Dickman both testified that they told Jon Jay, the attorney for Sentry Insurance, MixAir's general liability insurer, that they had assigned the patent to MixAir. A letter from Sentry to Vollmer and copied to Jay reflects that understanding. Dickman acknowledged that he did so to get insurance coverage in a patent-infringement suit against him and Vollmer personally, but said he later advised Jay that he misspoke. Sentry paid approximately $240,000 to defend the claims against them.

¶ 9 MixAir initially did not profit as anticipated. Loan accounts in the names of Vollmer, Dickman and several of their family members were created to finance the shortfall. The parties made other efforts, such as charging MixAir for the full cost of rent, labor and materials, but MixAir again required additional cash infusions in the form of loans. Vollmer testified that he and his family and their companies would not have continued to extend credit to MixAir or paid patent prosecution expenses had there been no agreement to assign the patent.

¶ 10 Relations between Dickman and Vollmer soured, and in late 2003 Dickman filed this action against Vollmer and MixAir. Dickman sought to have MixAir dissolved and have himself appointed as receiver pursuant to WIS. STAT. §§ 180.1430 and 180.1432 (2005-06).⁴ He alleged that Vollmer controlled MixAir in an illegal, oppressive and fraudulent manner, misapplied and wasted corporate assets, and breached his fiduciary duties. Vollmer and MixAir counterclaimed for breach of contract and conversion, requested a declaration that Vollmer had not breached his fiduciary obligations to MixAir, and sought specific performance of an alleged oral agreement to assign to MixAir the patent Vollmer and Dickman jointly held. Vollmer counterclaimed for an accounting, and MixAir counterclaimed that Dickman breached the fiduciary duties he owed MixAir.

¶ 11 MixAir lost its bid to be dismissed through summary judgment, mediation failed, and the case went to a court trial lasting seven days. The trial court saw three main issues: (1) whether Dickman and Vollmer agreed to assign the patent to MixAir; (2) whether either principal breached his fiduciary duty to MixAir or to each other; and (3) whether MixAir should be dissolved and a receiver appointed. The trial court found in regard to those issues that: (1) the parties orally agreed to assign the diffuser patent to MixAir; (2) Vollmer did not breach his fiduciary duties; and (3) Dickman was not entitled to have MixAir judicially dissolved. The court ordered Dickman to execute the assignment and dismissed his complaint. Dickman appeals; MixAir and Vollmer protectively cross-appeal.

Assignment of the Patent

¶ 12 Dickman steadfastly denies agreeing to assign the patent. He maintains that the 1997 agreement was the parties' sole agreement as to the diffuser and its patent. He asserts that because the agreement is silent as to any assignment and requires modifications to be in writing, the parties could not have agreed orally to an assignment. He contends the agreement is unambiguous and that we therefore must enforce it without searching elsewhere for evidence of the parties' intent. See Kernz v. J.L. French Corp., 2003 WI App 140, ¶ 9, 266 Wis.2d 124, 667 N.W.2d 751.

¶ 13 We concur that the agreement is unambiguous and that it does not address assigning the patent. Where we part ways with Dickman is on whether the written agreement is the final answer to the assignment question. We conclude it is not, and not simply because it predates both the issuance of the patent and MixAir's incorporation. Rather, the agreement does not govern the assignment of the patent because, just as it states, the agreement "is for the purpose of marketing a diffuser." Accordingly, our task is not to interpret the agreement but to review the trial court's finding that the parties orally agreed to assign the patent.

¶ 14 We uphold a trial court's findings of fact unless they are clearly erroneous. Global Steel Prods. Corp. v. Ecklund Carriers, Inc., 2002 WI App 91, ¶ 10, 253 Wis.2d 588, 644 N.W.2d 269. We do not reweigh the evidence or reassess the witnesses' credibility, but will search the record for evidence that supports findings the trial court made, not for findings it could have made but did not. See Noble v. Noble, 2005 WI App 227, ¶¶ 15-16, 287 Wis.2d 699, 706 N.W.2d 166, review denied, 2006 WI 23, 289 Wis.2d 11, 712 N.W.2d 36. Because it is for the trial court to resolve conflicts in the testimony, we will uphold its calls as to witness credibility unless they are inherently or patently incredible, and we will not second-guess the trial court's...