Lambo v. Kathleen D'Acquisto Irrevocable Trust, No. 2006AP912 (Wis. App. 9/19/2007)

• Decision Date: 19 September 2007
• Docket Number: No. 2006AP912.,2006AP912.
• Parties: Patrick Lambo, Plaintiff-Appellant-Cross-Respondent, v. Kathleen D'Acquisto Irrevocable Trust and Anthony D'Acquisto, as an individual and trustee of the Kathleen D'Acquisto Irrevocable Trust, Defendants-Respondents-Cross-Appellants.
• Court: Wisconsin Court of Appeals

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Patrick Lambo, Plaintiff-Appellant-Cross-Respondent, v. Kathleen D'Acquisto Irrevocable Trust and Anthony D'Acquisto, as an individual and trustee of the Kathleen D'Acquisto Irrevocable Trust, Defendants-Respondents-Cross-Appellants.

No. 2006AP912.

Court of Appeals of Wisconsin, District II.

Opinion Filed: September 19, 2007.

APPEAL and CROSS-APPEAL from a judgment of the circuit court for Waukesha County: ROBERT G. MAWDSLEY, Judge. Affirmed.

Before Brown, C.J., Anderson, P.J., and Nettesheim, J.

¶ 1 PER CURIAM.

Patrick Lambo has appealed from a judgment dismissing various claims brought by him against the Kathleen D'Acquisto Irrevocable Trust (the Trust) and Anthony D'Acquisto, as an individual and trustee of the Trust. The Trust and D'Acquisto have cross-appealed from the portion of the judgment awarding Lambo damages on his claim of unjust enrichment. We affirm the judgment in its entirety.

¶ 2 This action arises from the purchase and development of two non-contiguous lots that were located in the town of Pewaukee and sold by Waukesha County. Lambo learned that the lots were going to be sold in 1992, and subsequently submitted a bid to purchase them. However, his initial attempts to obtain financing for the purchase failed. On May 17, 1994, after the Waukesha County Board had accepted his bid but before closing, Lambo contacted D'Acquisto and persuaded him to provide the funds. On July 13, 1994, the Trust purchased the lots, paying the entire $107,850 purchase price. The properties were titled in the name of the Trust, which was listed as the grantee on the title transfer papers. Lambo signed the closing documents as the agent for the Trust.

¶ 3 In the years following the purchase, the Trust paid all fees, expenses and taxes related to the properties. Lambo expended personal effort to develop the properties, including working to get the property annexed to the city of Waukesha and to provide utilities, attempting to obtain a zoning change, and attempting to locate buyers for the properties.

¶ 4 In January 2000, D'Acquisto sent a letter to Lambo's counsel denying Lambo's claim that a partnership existed between them. In December 2001, Lambo commenced this action against the Trust and D'Acquisto, alleging six claims and seeking either a fifty percent partnership interest in the properties or compensation for his services in improving the properties. The trial court granted summary judgment dismissing his claims for an interest in the properties based on a partnership agreement, partnership by promissory estoppel, promissory estoppel, and fraud.¹ At trial, it granted the defendants' motion for a directed verdict dismissing Lambo's claim for quantum meruit. It allowed his claim for unjust enrichment to go to the jury and, on motions after verdict, upheld the jury's award of $30,000 for unjust enrichment.

¶ 5 Lambo raises numerous issues in his appeal, which we address seriatim. His first challenges are to the trial court's summary judgment rulings.

¶ 6 When reviewing a grant of summary judgment, we apply the same methodology as the trial court and decide de novo whether summary judgment was appropriate. Coopman v. State Farm Fire & Cas. Co., 179 Wis. 2d 548, 555, 508 N.W.2d 610 (Ct. App. 1993). Summary judgment is warranted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." WIS. STAT. § 802.08(2) (2005-06).² Any reasonable doubt as to the existence of a genuine issue of material fact must be resolved against the party moving for summary judgment. Heck & Paetow Claim Serv., Inc. v. Heck, 93 Wis. 2d 349, 356, 286 N.W.2d 831 (1979).

¶ 7 Lambo's first argument is that the trial court erred in granting summary judgment dismissing his claim that a partnership existed. He contends that he and D'Acquisto verbally agreed to become 50/50 partners, sharing equally in the profits and losses related to the properties. He contends that pursuant to their agreement, D'Acquisto agreed to be the financial partner providing the funds for the purchase and development of the lots, while he agreed to provide the labor for development. He contends that their actions and conduct compel a conclusion that they had a partnership agreement.

¶ 8 The trial court dismissed Lambo's claim to a partnership interest after concluding that it was barred by the statute of frauds. It also concluded that, even viewing the facts most favorably to Lambo, the record did not support a finding that he and D'Acquisto had a meeting of minds and entered into a contract. Because we agree that the summary judgment record fails to establish that a partnership agreement existed or give rise to a material issue of fact for trial, we find it unnecessary to address the statute of frauds issue.

¶ 9 A partnership is an association of two or more persons to carry on as co-owners a business for profit. Wis. Stat. § 178.03(1). "A partnership agreement, whether expressed or implied, may be in writing or proven by circumstantial evidence demonstrating that the conduct of the parties was of such a nature as to clearly express the mutual intent of the parties to enter into a contractual relationship." Heck, 93 Wis. 2d at 359. To have a partnership, there must be a meeting of minds of the parties. Id. The intention of one party alone cannot create a partnership. Id.

¶ 10 The burden of proving that a partnership agreement exists is on the party asserting its existence. Id. The four elements required to create a partnership under WIS. STAT. ch. 178 are: (1) the contracting parties must intend to form a bona fide partnership and accept the legal requirements and duties necessary to such a relationship; (2) there must exist a community of interest in the capital employed by the partnership; (3) each partner must have an equal voice in the management of the partnership operation; and (4) the profits and losses of the corporation must be shared and distributed. Heck, 93 Wis. 2d at 359-60. "The ultimate and controlling test as to the existence of a partnership is the parties' intention of carrying on a definite business as co-owners. Such intention may be determined from the terms of the parties' agreement or from their conduct under the circumstances of the case." Id. at 360.

¶ 11 Lambo contends that the parties' conduct reflected their intent to create a partnership. He relies on evidence that D'Acquisto represented to third parties that they were partners and permitted others, including Lambo, to represent that they were partners. Lambo also relies on evidence that he had the approval of D'Acquisto to enter into contracts with companies and businesses to perform work in conjunction with developing the properties and that he had D'Acquisto's approval to sign legal documents, including counteroffers for the sale of the lots, as an owner of the properties. He contends that the properties were titled in the name of the Trust merely to avoid problems arising from judgments and liens against himself and D'Acquisto.

¶ 12 While the record supports Lambo's allegations regarding the parties' representations, the real issue is not how D'Acquisto chose to represent their relationship to others, but what understanding was reached between them. The evidence relied on by Lambo does not establish or permit the inference that Lambo and D'Acquisto intended to form a bona fide partnership and to accept the legal requirements and duties attendant to such a relationship. At best, as noted by the trial court, the evidence demonstrated an effort by the parties to come to an agreement, which never came to fruition.

¶ 13 In reaching this conclusion, we note that Lambo submitted six proposed written partnership agreements for D'Acquisto's signature between 1994 and 1996, and D'Acquisto refused to sign any of them. Although each of the proposed agreements purported to establish 50/50 ownership of the properties and a sharing of profits and losses on a 50/50 basis, the details of those provisions were never clarified. In addition, each proposed agreement contained additional provisions which varied from draft to draft. Some contained provisions entitling Lambo to have his alleged one-half interest in the property retitled to whomever he named; some gave Lambo a right of first refusal and option to purchase D'Acquisto's interest in the properties at half the purchase price plus an unspecified amount of interest; and one conferred a right to borrow against the properties for personal use. In addition, some of the proposed agreements provided that Lambo was obligated to pay interest at an unspecified rate if the properties were not sold or developed within two years and he still had not paid half of the purchase price. Others contained no such provisions.

¶ 14 Despite D'Acquisto's failure to sign any of the proposed partnership agreements, on January 18, 2000, Lambo again wrote a letter alleging that they were partners. In it, he purported to refresh D'Acquisto's memory as to the terms of their agreement. However, he set forth different terms than had been contained in the prior proposed agreements, contending that he and D'Acquisto were 50/50 partners as to the ownership of the land and profits and losses, but that D'Acquisto had agreed to loan the purchase money to Lambo at the time the properties were acquired and that the loan would be interest free for the first one or two years, with 8% interest thereafter. Lambo also alleged that he and D'Acquisto had agreed that Lambo would pay back the $107,850 plus other fees, expenses and taxes "out of my 50% profit when the land was sold or develop (sic)."

¶ 15 When a dispute over material terms manifests a party's lack of intent to contract, no contract results. Novelly Oil Co. v. Mathy Constr. Co., 147 Wis. 2d 613, 617, 433...