Jungbluth v. Hometown, Inc., 94-1523-FT

• Decision Date: 27 February 1996
• Docket Number: No. 94-1523-FT,94-1523-FT
• Citation: 201 Wis.2d 320,548 N.W.2d 519
• Parties: Michael JUNGBLUTH, Plaintiff-Respondent-Petitioner, v. HOMETOWN, INC., a Wisconsin Corporation, Defendant-Appellant. . Oral Argument
• Court: Wisconsin Supreme Court

Page 519

548 N.W.2d 519

201 Wis.2d 320

Michael JUNGBLUTH, Plaintiff-Respondent-Petitioner, v. HOMETOWN, INC., a Wisconsin Corporation, Defendant-Appellant.

No. 94-1523-FT.

Supreme Court of Wisconsin.

Oral Argument Feb. 27, 1996.

Decided May 23, 1996.

For the plaintiff-respondent-petitioner there were briefs by Frank R. Terschan and Terschan & Steinle, Ltd., Milwaukee and oral argument by Frank R. Terschan.

For the defendant-appellant there was a brief by Eric J. Van Vugt, Michael D. Zeka and Quarles & Brady, Milwaukee and oral argument by Eric J. Van Vugt.

JON P. WILCOX, Justice.

The nature of this controversy involves a statutory interpretation of the Wisconsin Fair Dealership Law (WFDL), Wis.Stat. Ch. 135 (1993-94). The plaintiff-respondent-petitioner Michael Jungbluth (Jungbluth) seeks review of a published decision of the court of appeals, Jungbluth v. Hometown, Inc., 192 Wis.2d 450, 531 N.W.2d 412 (Ct.App.1995), reversing a judgment of the circuit court which had awarded Jungbluth damages and attorney fees totalling over $25,000, for the defendant-appellant Hometown, Inc.'s (Hometown) violation of the 90-day notice requirement in Wis.Stat. § 135.04 ¹ (1993-94). ² Finding the statute at issue to be ambiguous, the court of appeals opined that the notice requirement of Wis.Stat. § 135.04 applies to a substantial change in the competitive circumstances of a dealership agreement. Jungbluth, 192 Wis.2d at 456, 531 N.W.2d 412. The appellate court further held that because Hometown's conduct was permitted under the terms of the lease agreement, no substantial change in competitive circumstances of the dealership agreement had occurred. Id. at 462, 531 N.W.2d 412.

On review before this court, Jungbluth raises two issues for our consideration. The first question is a very narrow one, and requires us to consider whether the court of appeals' attachment of the phrase "of a dealership agreement" on the end of the "substantial change in competitive circumstances" language in Wis.Stat. § 135.04 conflicts with the remedial purpose underlying the WFDL, as enunciated by the legislature. In accord with the well-established goal of statutory interpretation, we conclude that the insertion of the phrase "of a dealership agreement" within the statute would profoundly undermine the expressed intent of the legislature. The decision of the court of appeals unnecessarily confers power upon the grantor, a party the legislature has already concluded enjoys superior bargaining power, at the expense of the inherently inferior dealer.

The second issue before this court requires us to determine whether Hometown's conduct substantially changed the competitive circumstances of Jungbluth's dealership so as to require notice pursuant to Wis.Stat. § 135.04. Based upon the facts before us, we conclude that the seven-month period of construction, during which Hometown replaced the fuel storage tanks and embarked upon an extensive remodeling of the service station premises, constituted a substantial change in competitive circumstances. As such, Hometown was required to provide Jungbluth with 90 days' prior written notice as stated in § 135.04, before undertaking such action. We therefore reverse the court of appeals' decision to the contrary.

The relevant facts on this appeal are uncontested. In September 1990, Jungbluth and Hometown executed a lease agreement and a representative agreement by which Jungbluth would operate a service station owned by Hometown and located in New Berlin. Jungbluth had engaged in the ownership and operation of service stations in the Milwaukee suburbs since the early 1980's. Under the terms of the dealership agreement, Hometown had reserved the right to install underground fuel storage tanks; and though not expressly articulated, Jungbluth does not contest Hometown's authority to remodel the service station. At the time the dealership agreement was signed, the station consisted of three service bays, a business office and convenience store, a lighted, paved driveway with access area, two gasoline islands equipped with pumps, eight dispensing hoses, and three grades of gasoline.

During the early part of October 1990, while Jungbluth was preparing to begin operation and promotion of the station, Hometown conducted routine testing on the underground gasoline storage tanks. Although the initial tests yielded inconclusive results for tank defects, Hometown was aware at that time that the tanks may have to be replaced. Rather than informing Jungbluth of this potential delay in operations, Hometown turned over control of the pumps to him on October 31, 1990. Shortly thereafter, additional tests conducted on November 7, 1990, confirmed that the tanks were leaking and would have to be replaced. In accord with federal and state regulation, Hometown immediately undertook the appropriate action to replace the tanks, informing Jungbluth that such a process typically required a window of two to four weeks.

During this period of tank replacement, soil contamination was discovered in the area near the old pumps. Steps to remediate the contaminated area were immediately undertaken by Hometown. As this work progressed, Hometown unilaterally decided to implement a service station remodeling plan, without any prior notification to Jungbluth. The renovations consisted of a new canopy, lights, islands and pumps. The remediation, tank replacement and remodeling involved a construction period which spanned from November 1990 through July 1991. The seven-month renovation of the station caused a substantial disruption in Jungbluth's business, as his consumer fuel availability was reduced to one functioning pump providing regular unleaded gasoline, and the station premises were in constant disrepair.

Thereafter, Jungbluth brought this action under the WFDL seeking damages for the losses incurred during the extensive period of excavation, a project initiated by Hometown without notification, as required by Wis.Stat. § 135.04. The complaint alleged that Hometown had "failed to notify the Plaintiff at least ninety (90) days prior to substantially changing the competitive circumstances of MICHAEL JUNGBLUTH'S dealership." Jungbluth, 192 Wis.2d at 454-55, 531 N.W.2d 412. A trial to the court was held in October 1993, the Honorable Michael J. Skwierawski presiding. Jungbluth presented evidence which demonstrated that the disarray of his service station operations precluded him from realizing sales of gasoline, convenience-store goods, auto repair items, and labor charges associated with auto repair. The circuit court concluded that Hometown's actions had substantially changed Jungbluth's competitive circumstances, and thus, their failure to provide 90 days' prior written notice had violated Wis.Stat. § 135.04. Id. at 456, 531 N.W.2d 412. The court affixed Jungbluth's damages at $4,666.38, and awarded $21,000 in attorney fees as permitted by the fair dealership law. Id. at 455, 531 N.W.2d 412; see also Wis.Stat. § 135.06.

The court of appeals reversed the decision of the circuit court, holding that the phrase "of a dealership agreement" should be inserted into Wis.Stat. § 135.04 so as to harmonize what the court felt was an ambiguous section with Wis.Stat. § 135.03, while still remaining within the meaning and intent of the legislature. Jungbluth, 192 Wis.2d at 458, 531 N.W.2d 412. The appellate court's conclusion arose from the argument as advocated by Hometown, in which it claimed that § 135.04 must be read in conjunction with § 135.03 ³ to require 90 days' notice when the grantor substantially changes the competitive circumstances of the dealership agreement. Id. at 456, 531 N.W.2d 412.

The court thereafter considered the question of whether Hometown's actions constituted a substantial change in the competitive circumstances of Jungbluth's dealership agreement. Contemplating the fact that fuel tank replacement and service station remodeling were allowed under the agreement, the court of appeals concluded that no substantial change in the competitive circumstances of the dealership agreement had occurred, and thus, the notice requirement expressed in Wis.Stat. § 135.04 had not been triggered. Id. at 462, 531 N.W.2d 412.

An interpretation of the meaning of a statute presents a question of law. J.A.L. v. State, 162 Wis.2d 940, 962, 471 N.W.2d 493 (1991). As such, we employ a de novo standard of review in ascertaining the intent of the legislature. Ball v. District No. 4, Area Bd., 117 Wis.2d 529, 537-38, 345 N.W.2d 389 (1984). This court's first resort is to the plain language of the statute itself. If the meaning of the statute is plain, we are prohibited from looking beyond the language to ascertain its meaning. Marshall-Wis. Co., Inc. v. Juneau Square Corp., 139 Wis.2d 112, 133, 406 N.W.2d 764 (1987). The duty of the court is merely to apply that intent to the facts and circumstances of the question presented. J.A.L., 162 Wis.2d at 962, 471 N.W.2d 493. If and only if the language of the statute does not clearly or unambiguously set forth the legislative intent, however, will this court construe the statute so as to ascertain and carry out the legislative intent. Green Bay Redev. Auth. v. Bee Frank Inc., 120 Wis.2d 402, 409, 355 N.W.2d 240 (1984). In such case, we examine the history, context, subject matter, scope and object of the statute. Id. In the exercise of this process, we are guided by a fundamental axiom of judicial construction which is to avoid any result that would be absurd or unreasonable. Id.

I.

The first issue that we address is whether the court of appeals' insertion of the phrase "of a dealership agreement" into Wis.Stat. § 135.04 is at odds with the legislative purpose and intent of the fair dealership law. We conclude that indeed it is.

In drafting the regulatory framework of the WFDL, the legislature very clearly articulated the intent and purpose to be embodied within the statute:

(2) The...