Ladopoulos v. Pdq Food Stores

Decision Date09 May 2002
Docket Number01-2268
Citation256 Wis. 2d 694,647 N.W.2d 468
PartiesNick Ladopoulos, Plaintiff-Appellant, v. PDQ Food Stores, Inc., Defendant-Respondent.STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT IV COURT OF APPEALS
CourtWisconsin Court of Appeals

APPEAL from a judgment of the circuit court for Dane County: JOHN C. ALBERT, Judge. Affirmed.

Appeal Cir. Ct. No. 99-CV-2399

Cornelia G. Clark Clerk of Court of Appeals

Before Vergeront, P.J., Dykman and Deininger, JJ.

¶1. DYKMAN, J.

Nick Ladopoulos appeals from a summary judgment dismissing his claims for intentional misrepresentation, tortious interference with a prospective contract and breach of the covenant of good faith and fair dealing against PDQ Food Stores, Inc. In addition, Ladopoulos challenges the circuit court's decision limiting his damages on his breach of contract claim to $10,000, and declining to award him attorney's fees, as provided by the contract. We agree with the circuit court that there are no genuine issues of material fact on any of Ladopoulos's claims, and therefore affirm.

BACKGROUND

¶2. The following facts are undisputed. Nick Ladopoulos bought a 5.8 acre parcel of land in Westport, Wisconsin, with the intent to develop part of the property for retail and residential space and to sell the remaining land for use as a convenience store selling gasoline. He obtained conditional use permits for this purpose, effective October 1998 and expiring one year later.

¶3. Ladopoulos and PDQ entered into a purchase agreement on October15, 1998, under which PDQ agreed to pay Ladopoulos $230,000 for the part of the property to be used as a convenience store selling gasoline. Included in the agreement was a default provision. It provided in part that, if PDQ breached the agreement, it would pay Ladopoulos the deposit ($10,000) as liquidated damages and as "full and complete settlement of any and all claims Seller may have against PDQ." Subject to the satisfaction of several contingencies, the agreement required PDQ to close on the purchase by January 13, 1999. However, on February 8, 1999, Ladopoulos and PDQ amended the purchase agreement so that the contingency deadlines were extended to April 15, 1999, and the closing date was extended to June 3, 1999.

¶4. On June 22, 1999, shortly after Mobil Mart closed a sale on nearby property, PDQ informed Ladopoulos in a letter that it was rescinding the purchase agreement. PDQ's stated reason for doing so was that it had "received reports and estimates that indicate that it will cost in excess of $10,000 to correct adverse soil conditions on the Property." PDQ relied on section 5(E)(iii) of the agreement, which permitted rescission if "the total anticipated cost to remediate all such soil conditions is more than" $10,000. In a response dated June 23, 1999, Ladopoulos wrote that the soil contingency had been satisfied "long ago" and that he was willing to pay for any soil remediation costs over $10,000.

¶5. PDQ did not purchase the property. Instead, it tendered a $10,000 check to Ladopoulos, stating: "Your endorsement of the check will confirm that ... all disputes between you and PDQ are fully settled and compromised." Ladopoulos did not endorse the check and eventually sent it back to PDQ.

¶6. Ladopoulos filed a complaint against PDQ on October 7, 1999. In his second amended complaint, he asserted four causes of action: (1)intentional misrepresentation; (2)breach of contract; (3)breach of duty of good faith and fair dealing; and (4)tortious interference with a prospective contractual relationship. PDQ moved for summary judgment on May 22, 2000. After briefing and oral argument, the court granted PDQ's motion with respect to the intentional misrepresentation, breach of duty of good faith, and tortious interference claims. However, the court granted summary judgment in favor of Ladopoulos on the breach of contract claim. It concluded that under the terms of the agreement, the contingencies were deemed satisfied as of April 13, 2000, and therefore PDQ could not rescind the agreement based on the soil contingency. The court also concluded, however, that Ladopoulos's damages were limited to the $10,000 plus interest provided in the agreement.

¶7. The circuit court next considered the issue of attorney's fees. The parties' agreement states: "In connection with any litigation arising out of this Agreement, the prevailing party shall be entitled to recover all costs incurred, including reasonable attorney's fees." The court concluded that both PDQ and Ladopoulos were prevailing parties because the court entered judgment for both parties on at least one claim. Although it concluded that PDQ was three-fourths successful and Ladopoulos was one-fourth successful, the court determined that "justice and fair play" would best be served if neither party received its attorney's fees. Ladopoulos appeals.

¶8. Further facts will be discussed throughout the decision as they become relevant.

DECISION
A. Standard of Review

¶9. We review a circuit court's grant of summary judgment de novo, applying the same methodology as the circuit court. Yahnke v. Carson, 2000 WI 74, ¶10, 236 Wis.2d 257, 613 N.W.2d 102. Summary judgment is appropriate when the admissible evidence demonstrates that there is "no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Wis. Stat. §802.08 (1999-2000).1 We draw all reasonable inferences in favor of the non-moving party. Hansen v. New Holland N. Amer., 215 Wis. 2d 655, 662-63, 574 N.W.2d 250 (Ct. App. 1997). A factual issue is genuine if the evidence is such that reasonable jurors could return a verdict in favor of the non-moving party. Kenefick v. Hitchcock, 187 Wis.2d 218, 224, 522 N.W.2d 261 (Ct. App. 1994). Ultimately, the party bearing the burden of proof on a claim at trial also has the burden "`to make a showing sufficient to establish the existence of an element essential to that party's case.'" Transportation Ins. Co. v. Hunzinger Constr. Co., 179 Wis.2d 281, 292, 507 N.W.2d 136 (Ct. App. 1993) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).

B. Breach of Contract and Liquidated Damages

¶10. The circuit court denied PDQ's summary judgment motion as it pertained to Ladopoulos's breach of contract claim and instead entered judgment for Ladopoulos, awarding him $10,000 under the contract's liquidated damages provision. PDQ has not appealed from this decision. Ladopoulos, however, contends that the liquidated damages provision is unenforceable. That clause provides in part:

DEFAULT. If either party fails to perform that party's respective obligations hereunder (except as excused by the other party's default), the party claiming default shall make written demand for performance.... If PDQ fails to comply with such written demand within ten (10) days after receipt thereof, Seller shall be paid the Deposit and any accrued interest as liquidated damages as full and complete settlement of any and all claims Seller may have against PDQ, which Seller agrees shall be Seller's sole and exclusive remedy under this Agreement.

¶11. Ladopoulos argues the provision is unenforceable because $10,000 is "inadequate and grossly disproportionate" to his "foreseeable" damages. Specifically, he contends that although $10,000 may have been a reasonable amount of compensation for taking the property off the market for ninety days, as the parties originally agreed, it was not reasonable when the closing date was extended an additional 140 days.

¶12. The test for determining the validity of a liquidated damages provision is whether it is reasonable under the totality of the circumstances. Wassenaar v. Panos, 111 Wis.2d 518, 526, 331 N.W.2d 357 (1983).2 The validity of a provision is a question of law. Id. at 524. However, where the circuit court has made factual findings in deciding the reasonableness of a provision, we review those findings under a clearly erroneous standard. Id. at 525. The circuit court concluded as a matter of law that the liquidated damages provision was reasonable. We therefore review its decision de novo.

¶13. Reasonableness is assessed by looking primarily at two factors: (1)the difficulty of estimating damages caused by a breach; and (2)how reasonable of an estimate the clause is of actual damages. Id. at 529-30.3 Applying this test, we conclude that the liquidated damages provision is enforceable. Ladopoulos does not argue that the damages for a failure to close the sale by PDQ would have been readily ascertainable in advance. Rather, he argues that the value of his site has "diminish[ed] very substantially" because another convenience store closed a sale on nearby property in June 1999. Beyond this allegation, however, he provides no evidence that his actual damages have greatly exceeded $10,000. Although Ladopoulos complains that his "impact analysis" was not completed when PDQ filed its motion for summary judgment, if Ladopoulos needed more time to oppose PDQ's motion, the proper response was a motion for additional discovery under Wis. Stat. §802.08(4). See Kinnick v. Schierl, Inc., 197 Wis.2d 855, 865, 541 N.W.2d 803 (1995); Park Bancorporation, Inc. v. Sletteland, 182 Wis.2d 131, 146, 513 N.W.2d 609 (Ct. App. 1994). He cannot complain now that PDQ's motion was filed before he had adequate time to oppose it. Further, as PDQ argues, Ladopoulos's difficulty in calculating his damages demonstrates the reasonableness of stipulating to damages in advance. We therefore agree with the circuit court that Ladopoulos has failed to create a genuine issue of fact regarding the validity of the liquidated damages provision.

C.Intentional Misrepresentation

¶14. Ladopoulos alleged in his complaint that PDQ falsely represented "its intent and desire to construct one of its retail locations" on his property and that his reliance on PDQ's misrepresentations cost him "no less than $500,000." The circuit court dismissed Ladopoulos's intentional...

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    ... ... Ladopoulos v. PDQ Food Stores, Inc., 2002 WI App 165, 24, 256 Wis. 2d 694, 647 N.W.2d 468. However, a breach ... ...

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