I.W.S., Inc. v. Huber
| Decision Date | 26 August 1987 |
| Citation | 414 N.W.2d 319,141 Wis.2d 974 |
| Parties | NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. I.W.S., INC. and JAMES A. HEYDEN, Plaintiffs-Respondents, v. JOHN D. HUBER, FIRST WISCONSIN NATIONAL BANK OF MILWAUKEE, JAMES LAHR, UNIVERSITY TITLE SERVICE, INC., MICHAEL MACIEJEWSKI, ISLAND VIEW HOMEOWNERS ASSOCIATION, INC., AETNA FINANCE COMPANY, d/b/a THORP FINANCE, BRUCE and BERNADETTE LANSER and HERITAGE BANK, Defendants, SAFECO TITLE INSURANCE COMPANY, Defendant-Appellant, FIRST WISCONSIN NATIONAL BANK OF MILWAUKEE, Third-Party Plaintiff, v. RAYMOND POGGENBURG, Third-Party Defendant. 86-1357. |
| Court | Wisconsin Court of Appeals |
Circuit Court, Racine County
Affirmed
Appeal from a judgment of the circuit court for Racine county: Dennis J. Flynn, Judge.
Before SCOTT, C.J., BROWN, P.J., and NETTESHEIM, J.
Safeco Title Insurance Company (Safeco) appeals a judgment of $548,391.48 against it and in favor of the plaintiffs, I.W.S., Inc. and James Heyden (collectively referred to as Heyden). Safeco alleges numerous errors beginning with the denial of its motion to dismiss and ending with the trial court's interpretation of the verdict. We conclude that none of the issues raised on appeal warrants reversal.
The basis for this claim arose out of an exchange of property between Heyden and John Huber on May 9, 1984. The evidence was conflicting in many respects. We adopt the facts which support the jury verdict.
Heyden and Huber were real estate investors who had dealt with each other at least three times prior to this transaction. On this occasion, Heyden agreed to transfer to Huber his interest in Units 24 and 25 of the Island View Condominiums in Burlington and an adjacent ten-acre tract (the Island View properties). In exchange, Huber was to transfer his interest in the Mayfair Motor Lodge in Wauwatosa (the Mayfair property). The value of the Island View properties was established by the parties at approximately $500,000. The Mayfair property was valued at $1,500,000, against which Huber represented there was an $800,000 first mortgage. Heyden agreed that Huber could obtain an additional $200,000 mortgage so the properties would each have $500,000 in unencumbered equity value.
At various times before and after the exchange, Heyden was in contact with Michael Maciejewski regarding the procurement of a title insurance policy on the Mayfair property. Huber had used Maciejewski's services in the past, including the prior transactions with Heyden. Maciejewski was an employee and part-owner of University Title Services (UTS), which in turn was an authorized insurance issuing agent for Safeco.
Prior to the transfer, Heyden discovered $194,851.25 in delinquent real estate taxes on the Mayfair property. Heyden contacted Huber, who referred Heyden to Maciejewski. Maciejewski assured Heyden that he was 'covered.' Subsequent to the transfer, Heyden learned of a second mortgage on the Mayfair property totaling $1,932,456.35, virtually eliminating any equity Heyden thought he had received.
The jury in its special verdict found that Maciejewski intentionally misrepresented to Heyden that UTS would issue a title policy showing title to be vested in Huber free and clear of all liens and encumbrances except the $800,000 mortgage and delinquent real estate taxes. Further, the jury found that Maciejewski entered into an oral contract with Heyden to insure title to the Mayfair property for $1,500,000 subject only to the same encumbrances. The jury also found that Maciejewski had authority to bind Safeco to that contract and that Safeco breached it. Additional facts will be stated as necessary.
Safeco first alleges error in the trial court's denial of its motion to dismiss for failure to state a claim. The trial court should dismiss the complaint only if 'it is quite clear that under no conditions can the plaintiff recover.' Evans v. Cameron, 121 Wis.2d 421, 426, 360 N.W.2d 25, 28 (1985). Pleadings are to be liberally construed with a view to substantial justice between the parties. Strid v. Converse, 111 Wis.2d 418, 422, 331 N.W.2d 350, 353 (1983). Whether the pleading is legally sufficient is a question of law which we may review independently. First Nat'l Bank of Wis. Rapids v. Dickinson, 103 Wis.2d 428, 433, 308 N.W.2d 910, 912 (1981).
Safeco's motion to dismiss is premised on the alleged omission of an allegation of consideration supporting the oral contract. Safeco contends that the error occurred when the trial court treated the motion as one for summary judgment and considered matters outside the pleadings. 1 The trial court in its decision, however, stated that the motion would also fail under the motion to dismiss standard. Independently reviewing the complaint, we agree with the trial court and affirm. The test for legal sufficiency of a complaint requires that we look not only to the facts pleaded, but also to all reasonable inferences derived from those facts. Morgan v. Pennsylvania Gen. Ins. Co., 87 Wis.2d 723, 731, 275 N.W.2d 660, 664 (1979).
There are allegations in the complaint that Maciejewski repeatedly represented to Heyden that a title policy would be forthcoming which would insure Heyden's interest. It is reasonable to infer from that allegation that Heyden desired the policy (particularly since be brought suit to enforce it) and that Heyden, as a real estate investor, expected to pay for the policy either directly or through Huber, the seller, in the form of increased purchase costs. This is consistent with the modern rule that a third party (Huber) may supply the consideration for a contract between two others (Heyden and UTS). 1 Corbin on Contracts § 124, at 532-33 (1963). A promise to pay which is implied by the conduct of the parties is sufficient consideration for a contract. California Wine Ass'n v. Wisconsin Liquor Co., 20 Wis.2d 110, 122, 121 N.W.2d 308, 314-15 (1963). By the facts alleged and reasonable inferences from them, we conclude that consideration was adequately pled.
Safeco's next contention is that the evidence was insufficient to establish an oral contract. On appeal from a jury verdict, the finding will be upheld if there is any credible evidence and inferences therefrom which would support the jury's finding. Ferraro v. Koelsch, 119 Wis.2d 407, 410-11, 350 N.W.2d 735, 737 (Ct. App. 1984).
We first deal with Safeco's argument that there was insufficient evidence to prove consideration. As previously stated, a third person can provide the consideration. 1 Corbin on Contracts § 124, at 532-33 (1963). Also, an implied promise to pay is sufficient consideration to support a contract. California Wine Ass'n, 20 Wis.2d at 122, 121 N.W.2d at 314-15.
Evidence was presented at trial regarding a prior course of dealings between Heyden, Huber and Maciejewski. As is customary in the industry, the seller (Huber) would order the title policy and pay the premium. In the transfer which is the subject of this case, there was testimony that Huber ordered the title policy for the Mayfair property from Maciejewski and that Heyden assumed Huber would be billed for the premium. From this testimony, it would be reasonable for the jury to infer that there was sufficient consideration to support the contract. Real estate dealings between the parties were always carried out in this manner, and there was no reason to believe that this transaction would be any different.
This situation is very similar to that presented in Campbell v. Wilson, 18 Wis.2d 22, 117 N.W.2d 620 (1962). In that case, the prior course of dealing showed that every year at about the same time the insurance agent would mail a renewed policy and a bill for the premium to the insured. The insured would pay the bill at his convenience. Prior to the end of a particular policy period, the insured requested an additional car on the policy, and the agent said he would be covered. No policy arrived and an accident occurred shortly after expiration. The court held that there was sufficient evidence for the jury to find a verbal agreement to renew the policy based on the past practice of the parties, despite the nonpayment of a premium. Id. at 32, 117 N.W.2d at 626. We recognize that Campbell involved a renewal of insurance, not a separate policy. However, we do not believe the facts are distinguishable enough to justify the application of a different rule of law. We conclude that there was sufficient evidence for the jury to find consideration for the title policy.
Safeco also argues that the evidence was insufficient to establish the very existence of an oral contract of insurance. An oral contract requires a 'meeting of the minds' on all essential elements of the contract. Carlson v. Grimsrud, 223 Wis. 561, 563, 270 N.W. 50, 51 (1937). It is not necessary to prove all the conceivable elements. See Roeske v. Diefenbach, 75 Wis.2d 253, 258-61, 249 N.W.2d 555, 558 (1977).
At trial, there was testimony to prove the identity of the parties to the agreement, the title which was to be insured, who would pay the premium, and when the coverage would begin. In addition, there was evidence that Maciejewski was aware of the face value of the policy and the fact that the title would be clear except for the $800,000 mortgage and delinquent real estate taxes. While this may not contain all the details of a typical title insurance policy, it is sufficient evidence for the jury to find that all essential elements were agreed upon.
The next issue raised by Safeco is whether the trial court erred in denying Safeco permission to use a previously admitted exhibit in cross-examination. Regarding restriction of cross-examination, this court will reverse only if it clearly appears that the trial court abused its discretion and if the error affected a substantial right of the complaining party and...
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