Koble Invs. v. Marquardt

• Docket Number: 2022AP182
• Decision Date: 23 April 2024
• Parties: Koble Investments, Plaintiff-Respondent, v. Elicia Marquardt, Defendant, v. James Miller, Intervenor-Appellant.
• Court: Wisconsin Court of Appeals

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Koble Investments, Plaintiff-Respondent,
v.
Elicia Marquardt, Defendant,
v.
James Miller, Intervenor-Appellant.

No. 2022AP182

Court of Appeals of Wisconsin, District III

April 23, 2024

APPEAL from an order of the circuit court for Marathon County: No. 2020SC979 LAMONT K. JACOBSON, Judge.

Before Stark, P. J., Hruz and Gill, JJ.

GILL, J.

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¶1 This case began as an eviction action by Koble Investments against its tenant, Elicia Marquardt. This appeal, however, pertains to Marquardt's counterclaims against Koble and, more specifically, to efforts by Marquardt's former attorney, James Miller, to recover attorney fees and costs. In particular, Attorney Miller contends that the circuit court erred by rejecting Marquardt's counterclaim alleging a violation of WIS. STAT. § 427.104(1)(j) (2021-22),^[1] a provision of the Wisconsin Consumer Act (WCA), and her counterclaim alleging that her lease was void and unenforceable under Wis.Stat. § 704.44(10) and Wis. Admin. Code § ATCP 134.08(10) (Oct. 2021).^[2]Attorney Miller therefore argues that he is entitled to recover attorney fees and costs under WIS. STAT. § 425.308(1) for Koble's violation of the WCA and under WIS. STAT. § 100.20(5) for Koble's violation of § ATCP 134.08. Attorney Miller also asserts that Marquardt is entitled to damages on her void lease claim.

¶2 As explained below, we conclude that the circuit court erred by determining that the WCA did not apply to Marquardt's residential lease, and we further conclude that the undisputed facts show that Koble violated WIS. STAT. § 427.104(1)(j). Additionally, we agree with Attorney Miller that Marquardt's lease was void and unenforceable under WIS. STAT. § 704.44(10) and WIS. Admin. Code § ATCP 134.08(10) because the lease allowed Koble to evict a tenant for a crime committed on the rental premises but failed to include the mandatory domestic abuse notice. We therefore reverse the circuit court's decision and remand for a determination of Attorney Miller's reasonable attorney

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fees and costs, and for a determination of the damages that Marquardt is entitled to recover on her void lease claim.

BACKGROUND

¶3 In May 2019, Marquardt and Koble entered into a twelve-month residential lease. On March 27, 2020, following the onset of the COVID-19 pandemic, Governor Tony Evers issued an emergency order prohibiting landlords "from serving any notice terminating a tenancy for failure to pay rent." The emergency order provided that it would remain in effect for a period of sixty days.

¶4 On May 15, 2020, while the sixty-day moratorium was in effect, Koble delivered to Marquardt a five-day eviction notice for nonpayment of rent. Koble then filed an eviction action against Marquardt on June 2, 2020. Koble's complaint sought both a judgment of eviction and $1,548 in damages.

¶5 Marquardt subsequently filed an answer and counterclaims asserting, among other things, that her lease was void and unenforceable under WIS. STAT. § 704.44(10) and Wis. Admin. CODE § ATCP 134.08(10) and that Koble had violated the WCA by serving the five-day eviction notice while the sixty-day moratorium was in place. At the return date on July 1, 2020, Koble moved to dismiss its eviction claim, and a court commissioner granted that request. On July 15, 2020, Koble filed an answer to Marquardt's counterclaims, in which it admitted that it had "delivered a 5-Day Right to Cure Notice to [Marquardt] during the governor of Wisconsin's moratorium on evictions."

¶6 Thereafter, proceedings continued on Marquardt's counterclaims. In addition, Marquardt filed a motion for attorney fees both under the WCA and based on Koble's purported violation of WIS. STAT. § 704.44(10) and

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WIS. ADMIN. CODE § ATCP 134.08(10). Attorney Miller also moved to intervene, seeking to represent his own interest in recovering attorney fees. During a damages hearing on September 29, 2020, a court commissioner dismissed Marquardt's counterclaims, denied her motion for attorney fees, and denied Attorney Miller's motion to intervene. As relevant here, the court commissioner concluded that the WCA did not apply and that Marquardt's lease was not void and unenforceable under § 704.44(10) and § ATCP 134.08(10).

¶7 Marquardt sought a trial de novo before the circuit court and renewed her motion for attorney fees. Attorney Miller also renewed his motion to intervene. In a written decision, the court denied the motion for attorney fees and the motion to intervene. The court concluded that Marquardt was "not a 'customer' under the [WCA]" and that the WCA does not apply to residential leases. The court further concluded that Marquardt's lease was not void and unenforceable under WIS. STAT. § 704.44(10) and Wis. Admin. Code § ATCP 134.08(10) because it did not "authorize eviction based on the commission of a crime." In addition, the court determined that because the lease was not void and unenforceable, Marquardt was not entitled to recover "rental payments and fees imposed by the lease" as pecuniary damages. Finally, the court denied Attorney Miller's motion to intervene.

¶8 A de novo hearing on Marquardt's remaining counterclaims took place on January 19, 2022. Marquardt did not appear at that hearing, and Attorney Miller therefore withdrew one of Marquardt's two remaining claims based on a failure of proof in the absence of her testimony. On Marquardt's final counterclaim, Attorney Miller argued that the circuit court should award punitive damages based on Koble's alleged conduct in serving illegal eviction notices on multiple tenants during the eviction moratorium.

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¶9 The circuit court rejected Marquardt's claim for punitive damages. It then granted Attorney Miller's motion to withdraw from representing Marquardt and permitted him to intervene in order to appeal "the issues underlying the request for statutory fee-shifting attorney fees/costs." Attorney Miller now appeals.^[3]

DISCUSSION

I. Marquardt's claim under the WCA

A. WISCONSIN STAT. §427.104(1) applies to Koble's attempt to collect a debt arising from Marquardt's residential lease.

¶10 As discussed above, Marquardt asserted a counterclaim based on Koble's alleged violation of WIS. STAT. § 427.104(1)(j), a provision of the WCA, which states:

(1) In attempting to collect an alleged debt arising from a consumer credit transaction or other consumer transaction, including a transaction primarily for an agricultural purpose, where there is an agreement to defer payment, a debt collector may not:

(j) Claim, or attempt or threaten to enforce a right with knowledge or reason to know that the right does not exist[.]

Specifically, Marquardt claimed that Koble violated § 427.104(1)(j) by serving her with a five-day eviction notice for failure to pay rent during the sixty-day

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moratorium imposed by the governor's March 27, 2020 emergency order. In response to Marquardt's counterclaim, Koble admitted that it had delivered a five-day eviction notice to Marquardt during the sixty-day moratorium. Koble argued, however, that the WCA did not apply to its residential lease with Marquardt. The circuit court agreed, concluding that a residential tenant-like Marquardt-cannot qualify as a "customer" for purposes of the WCA and that the WCA does not apply to residential leases.

¶11 Determining whether the WCA applies in the instant case requires us to interpret statutory language and apply it to undisputed facts. "The interpretation and application of a statute to an undisputed set of facts are questions of law that we review independently." McNeil v. Hansen, 2007 WI 56, ¶7, 300 Wis.2d 358, 731 N.W.2d273.

¶12 When interpreting a statute, our objective "is to determine what the statute means so that it may be given its full, proper, and intended effect." State ex rel Kalal v. Circuit Ct. for Dane Cnty., 2004 WI 58, ¶44, 271 Wis.2d 633, 681 N.W.2d 110. Our analysis begins with the plain language of the statute. Id., ¶45. "Statutory language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning." Id. In addition, statutory language must be interpreted "in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results." Id., ¶46. "If this process of analysis yields a plain, clear statutory meaning, then there is no ambiguity, and the statute is applied according to this ascertainment of its meaning." Id. (quoting Bruno v. Milwaukee County, 2003 WI 28, ¶20, 260 Wis.2d 633, 660 N.W.2d 656).

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¶13 As noted above, WIS. STAT. § 427.104(1) prohibits a "debt collector" from engaging in certain practices "[i]n attempting to collect an alleged debt arising from a consumer credit transaction or other consumer transaction, including a transaction primarily for an agricultural purpose, where there is an agreement to defer payment." Applying the plain language of § 427.104(1) to the undisputed facts, we agree with Attorney Miller that this statute applies to Koble's actions in this case.

¶14 As an initial matter, we agree with Attorney Miller's argument that Marquardt's residential lease of an apartment from Koble was a "consumer transaction," as that term is defined in the WCA. For purposes of the WCA, the term "consumer transaction" means "a transaction in which one or more of the parties is a customer for purposes of that transaction." WIS. STAT. § 421.301(13). The term "customer" means "a person other than an organization ... who seeks or acquires real or personal property, services, money or credit for personal, family or household purposes or, for purposes of [WIS. STAT.] ch. 427 only, for agricultural purposes." Sec. 421.301(17). The undisputed facts of this case establish that Marquardt was a "customer"...