Koutnik v. Martindale Pinnacle Constr., LLC
| Decision Date | 10 November 2022 |
| Docket Number | Appeal No. 2022AP168 |
| Citation | 984 N.W.2d 749 (Table),2023 WI App 1 |
| Parties | Joseph KOUTNIK and Andrea Vonckx, Plaintiffs-Respondents, v. MARTINDALE PINNACLE CONSTRUCTION, LLC, Defendant-Appellant. |
| Court | Wisconsin Court of Appeals |
¶1 Martindale Pinnacle Construction, LLC ("MPC") appeals a judgment entered following a trial in which the jury found MPC liable to two former employees, Joseph Koutnik and Andrea Vonckx, for unpaid wages. MPC argues that it is entitled to a new trial based on a series of purported trial errors, and it further argues that the circuit court erred in awarding attorney fees to Koutnik and Vonckx pursuant to WIS. STAT. § 109.03(6) (2019-20).1
¶2 We conclude that the circuit court properly exercised its discretion in denying MPC's motion for a new trial, and we decline to exercise our discretionary power of reversal. The purported errors MPC preserved for appeal were either not errors at all, or they did not affect MPC's substantial rights. We also conclude that the circuit court properly exercised its discretion in awarding statutory attorney fees. Therefore, we affirm the judgment, and we remand the matter to the circuit court for an award of Koutnik and Vonckx's reasonable attorney fees for this appeal.
¶3 MPC is a roofing and exterior construction contractor company and is wholly owned by Paul Martindale.
¶4 In early 2018, MPC hired Joseph Koutnik and Andrea Vonckx (collectively the "plaintiffs") as sales representatives. At the time of their hiring, the plaintiffs signed contracts classifying them as independent contractors. The contracts also included compensation provisions that were handwritten by Martindale, and which the circuit court later determined were ambiguous.
¶5 The plaintiffs both worked for MPC until early September 2018. During their period of employment, Martindale was in and out of jail, and he asked the plaintiffs to take on additional responsibilities and to effectively manage MPC in his stead. At some point, the relationship between Martindale and the plaintiffs broke down. MPC failed to pay its roofing contractors, who stopped performing work, and MPC lost business as a result. Martindale grew frustrated as he struggled to keep up with MPC's business dealings and to communicate with the plaintiffs. By the end of August, he ceased all direct communication with the plaintiffs.
¶6 Martindale was finally released from jail in late August or early September. A few days after his release, Martindale fired the plaintiffs. At that time, MPC had paid Koutnik a total of $11,500 and Vonckx a total of $6,500. Upon terminating their employment, Martindale refused to pay the plaintiffs the remaining amounts owed to them by MPC for a number of purported reasons. Martindale claimed, among other things, that MPC had no obligation to pay the plaintiffs for work they had performed because their employment had been terminated; that MPC lost customers due to the plaintiffs’ defective work; that the plaintiffs had committed misconduct; and that MPC did not need to pay them both because they were in a romantic relationship and could be paid as a team. Martindale later acknowledged that, at the time he refused to pay the plaintiffs, he had not done any accounting to determine what they were owed, nor had he reconciled the payments that the plaintiffs had already received against the terms of their contracts. Martindale acknowledged that he did not know whether MPC had paid the plaintiffs more than, less than, or the correct amount of compensation they were entitled to under the terms of their contracts with MPC.
¶7 The plaintiffs then commenced this action to recover unpaid wages and commissions. Their complaint alleged that they were either independent contractors or employees, and it claimed, among other things, breach of contract based on MPC's failure to pay commissions and a statutory wage claim under WIS. STAT. ch. 109. MPC counterclaimed for breach of contract, tortious interference with contract, civil conspiracy, and conversion.
¶8 Following discovery, the plaintiffs moved for summary judgment on their breach of contract and statutory wage claims, and for an order dismissing MPC's counterclaims. The circuit court granted the motion in part and denied it in part. It dismissed Martindale's counterclaims for tortious interference with contract and civil conspiracy. However, it concluded that genuine issues of material fact precluded summary judgment on the plaintiffs’ breach of contract and statutory wage claims. It concluded that the compensation terms of the contracts were ambiguous and, as such, it could not determine as a matter of law whether MPC had breached the contracts or how much the plaintiffs were owed. The court also concluded that genuine issues of material fact precluded granting summary judgment in favor of the plaintiffs on their statutory wage claim because their ability to recover under WIS. STAT. ch. 109 depended on whether they were employees, independent contractors, or managers, or whether they were hired in a commissioned sales capacity.
¶9 Pretrial, MPC filed several motions in limine. One of the motions sought to prevent the jury from learning that Martindale had been incarcerated, and another sought to prevent the jury from learning of a lawsuit between Martindale and his brothers ("the sibling lawsuit"). The circuit court granted these motions at the pretrial hearing. We describe the court's orders in greater detail in the discussion section below.
¶10 The case then proceeded to a four-day jury trial. During the trial, MPC objected to the introduction of various exhibits and testimony, some of which it argued violated the circuit court's orders in limine. At the end of the trial, the jury returned a verdict in favor of both plaintiffs on their statutory wage claims. The jury found that the plaintiffs were employees, and that MPC owed them unpaid wages in the form of unpaid commissions. The verdict awarded Koutnik $75,444 and Vonckx $65,593.
¶11 Post-verdict, the plaintiffs filed a motion seeking the imposition of statutory penalties, statutory prejudgment interest, costs, and attorney fees pursuant to WIS. STAT. § 109.03(6). MPC filed a motion for judgment notwithstanding the verdict, a renewed motion for a directed verdict, and a motion for a new trial pursuant to WIS. STAT. § 805.15.
¶12 The circuit court held a hearing, at which it denied all of MPC's post-verdict motions, including its motion for a new trial. The circuit court denied the plaintiffs’ motion for statutory penalties and prejudgment interest, but it granted their motion for costs and attorney fees. Ultimately, the circuit court awarded the plaintiffs $70,000 in attorney fees, to be split evenly between them.
¶13 On appeal, MPC argues it is entitled to a new trial based on several errors it alleges occurred during the trial. It also contends that the circuit court erroneously exercised its discretion by awarding attorney fees to the plaintiffs under WIS. STAT. § 109.03(6). We address these issues in turn.
¶14 To begin, MPC argues that it is entitled to a new trial because of multiple purported errors that occurred during the trial. MPC does not explicitly challenge the circuit court's denial of its motion for a new trial under WIS. STAT. § 805.15. It instead asks us to exercise our discretionary powers of reversal under WIS. STAT. § 752.35 and remand the case for a new trial on the grounds that the real controversy has not been fully tried. However, our supreme court has cautioned that § 752.35 "should be used only in exceptional cases," and only " ‘after all other claims," such as evidentiary errors, "have been weighed and determined to be unsuccessful.’ " State v. McKellips , 2016 WI 51, ¶52, 369 Wis. 2d 437, 881 N.W.2d 258 (quoted source omitted). Accordingly, we begin by reviewing the circuit court's denial of MPC's motion for a new trial under § 805.15 and, after concluding that no errors occurred that warrant a new trial under § 805.15, we briefly explain why this is not an exceptional case warranting discretionary reversal under § 752.35.
¶15 WISCONSIN STAT. § 805.15(1) governs motions for a new trial, and it provides that "[a] party may move ... for a new trial because of errors in the trial, ... or because of excessive or inadequate damages, ... or in the interest of justice." However, to warrant a new trial, an error must have affected the party's substantial rights:
No ... new trial [shall be] granted in an action or proceeding on the ground of ... the improper admission of evidence ... unless in the opinion of the court to which the application is made, after an examination of the entire proceeding, it shall appear that the error complained of has affected the substantial rights of the party seeking to ... secure a new trial.
WIS. STAT. § 805.18(2). Under our precedents, an error " ‘affect[s] the substantial rights of a party’ " if there is "a reasonable possibility that the error contributed to the outcome of the action." Nommensen v. American Cont'l Ins. Co. , 2001 WI 112, ¶52, 246 Wis. 2d 132, 629 N.W.2d 301 (quoted source omitted). "A reasonable possibility of a different outcome is a possibility sufficient to ‘undermine confidence in the outcome.’ " Id. (quoted source omitted). If the error at issue is not sufficient to undermine confidence in the outcome, the error is harmless. See id.
¶16 "This court approaches a request for new trial with great caution." Morden v. Continental AG , 2000 WI 51, ¶87, 235 Wis. 2d 325, 611 N.W.2d 659. Where, as here, the circuit court has denied a party's motion for a new trial, we recognize that " ‘a circuit court is in a better position than an appellate court to determine whether confidence in the correctness of the outcome at the original trial or hearing has been undermined.’ " Id. (quoted source omitted).
¶17 A circuit court's decision to grant or deny a motion for a new trial is discretionary,...
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