First Nat. Bank of Kenosha v. Scalzo
Decision Date | 25 November 1975 |
Docket Number | Nos. 608 and 609,s. 608 and 609 |
Citation | 235 N.W.2d 472,70 Wis.2d 691 |
Parties | The FIRST NATIONAL BANK OF KENOSHA, Trustee, Appellant, v. Phillip B. SCALZO and Eleanor I. Scalzo, husband and wife, Respondents. The FIRST NATIONAL BANK OF KENOSHA, Trustee, and Marie J. Tanner, Appellants, v. Phillip B. SCALZO and Eleanor I. Scalzo, husband and wife, Respondents. |
Court | Wisconsin Supreme Court |
Foley & Capwell, S.C., Racine, for appellants; Phillips, Richards & Mayew, Kenosha, of counsel.
Vaudreuil & Vaudreuil, Kenosha, for respondents.
Two issues are presented on this appeal:
1. Could the trial court properly consider the equitable remedy of reformation on the basis of allegations of fraud not raised prior to trial?
2. Was there a basis for reformation?
Although the trial court indicated that it did not have the authority to consider allegations not pleaded or specifically cited until the post-trial briefs, it did consider the question of fraud as a basis for equitable relief. It is unclear whether the court considered that the issue had been properly raised without prejudice to the defendant. Since fraud was not found to exist, no finding was made on the propriety of considering the issue.
The pleadings state that relief was requested on the basis of mutual mistake. At common law, the bill in equity was given stringent analysis:
Flint v. Jones (1856) 5 Wis. 424, 427.
Procedural distinctions between legal and equitable actions in Wisconsin have been abolished, Sec. 260.08, Stats., and variance between pleadings and proof is currently controlled by Sec. 263.28, Stats.:
'(2) When the variance is not material, the fact shall be found in accordance with the evidence and the court may order an amendment without costs.'
The appellants contend that Sec. 263.28, Stats., allows disregarding a variance between the allegation in a pleading and the proof submitted when no objection is made to such proof.
Respondent directs attention to another statute that should also be considered on the topic of proof variance from pleadings. Sec. 263.31, Stats., provides that when the allegation of a cause of action is unproved in its entire scope or meaning, a failure of proof rather than variance under Sec. 263.28 results. This section, however, must be read in conjunction with Sec. 269.52 which, as interpreted in Duffy v. Scott (1940), 235 Wis. 142, 148, 292 N.W. 273, 275, 129 A.L.R. 487:
'. . . softens the rigor of sec. 263.31, and renders it inapplicable in cases where evidence received without objection and not denied and not claimed to be subject to refutation, constitutes a cause of action other than that stated in the complaint.'
In this case the record is barren of any indication that a motion to amend the pleadings was made. The claimed new basis for the equitable remedy was raised in a post-trial brief, which for argument purposes can be taken as an indirect request for an amendment. Such proposed change was not the correction of a mere 'variance' but was in reality an alternative theory of remedy based partially on the plaintiff's failure to prove mutual mistake and based partially on Scalzo's strong refutation of any shared misconception of the boundaries of the transferred property. Thus the proper statutes and their fostered case law to be considered are Secs. 263.31, 269.52 and 269.44, Stats.
Wipfli v. Martin (1967), 34 Wis.2d 169, 148 N.W.2d 674, established that an amendment would not be allowed if it prejudiced the defendant. This unfairness could take the form of confrontation by issues of which it was unaware or unprepared to challenge. In such cases, the amendment could be denied or granted with a continuance for the defendant's preparation. Attempts to amend after the trial present unique problems of prejudice that cannot be cured and may dictate the necessity to refuse the amendment. See Johnson v. Chemical Supply Co. (1968), 38 Wis.2d 194, 205--206, 156 N.W.2d 455.
In regards to Mrs. Tanner's suit for recovery of the southern plot, Scalzo indicated in a pre-trial deposition that he was aware of the boundaries as listed on the offer to purchase and that he relied on them. He did admit that he believed Mrs. Tanner had a possible misconception of the extent of the land enumerated by the legal description, but only by inference from her conversation. In refuting the allegation that he shared Mrs. Tanner's mistake as to the extent of the land sold, Scalzo's trial testimony strongly reiterated his reliance on the legal description and repeated his awareness of Mrs. Tanner's possible error. Since the trial court refused to sustain the allegation of mutual mistake, the plaintiffs in this suit are attempting to seize Scalzo's trial testimony refuting mutual mistake and turn it into a claim for fraud. This posture was known to them prior to trial. As an alternative theory of remedy, it could have been offered as an amendment at a time when Scalzo would be warned to more thoroughly explain the nature of his impressions. It would have alerted him to explain his reliance on the legal description and officers of the Bank as Mrs. Tanner's agents rather than attempt to clarify her possible error.
As for the western plot, there is no evidence on the record that demonstrates Scalzo would be prejudiced by the added theory. This is so, however, because there is no evidence that such a theory could aid the plaintiff Bank. Scalzo at all times has given testimony that he knew the garage area was within the property sold. The Bank produced agent witnesses who testified to a statement by Scalzo, after the sale, of surprise that this plot was within his purchase. He denied ever saying this and the trial court agreed with his version. There is no testimony indicating that prior to the sale Scalzo knew that such property was not to be transferred and that he deliverately refrained from indicating an error in the legal description. The Bank's proffered testimony in fact was that Scalzo evidenced surprise, but no implication of fraud on his part arises from their failure to prove this allegation. Scalzo's denial is consistent with his assertions that he believed the garage area to be within his purchase. Testimony as to an explanation to the contrary in his presence was refuted not only by him but by Mrs. Tanner.
In this latter case, the fraud theory is totally unproved. Such a theory is more applicable to Mrs. Tanner's suit although prejudice to the defendant is more potential by the failure to timely acquaint him with that allegation. The trial court, however, did consider the issue and found that it was unsupported; thus no need arose to consider the detriment to Scalzo by its consideration. We think the trial court's conclusion was correct.
It was on the alleged post-sale surprise of Scalzo that the Bank based its reformation claim as to the garage area....
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