McDonald v. Century 21 Real Estate Corp., 84-1717
| Decision Date | 01 May 1986 |
| Docket Number | No. 84-1717,84-1717 |
| Citation | 132 Wis.2d 1,390 N.W.2d 68 |
| Parties | Mac R. McDONALD and Patricia McDonald, Plaintiffs-Appellants and Cross- Respondents, v. CENTURY 21 REAL ESTATE CORPORATION, a wholly owned subsidiary of Trans World Corp. and Century 21 Real Estate of the Midwest, Inc., Defendants-Respondents and Cross-Appellants, Century 21 Blackmon Realty, Inc., Richard Blackmon and Interlease Group, Inc., f/k/a Agrico Lease, Inc., Defendants-Respondents. |
| Court | Wisconsin Court of Appeals |
Review Denied.
Daniel A. Rottier, Madison, argued, for plaintiffs-appellants and cross-respondents; Habush, Habush & Davis, S.C., Madison, on brief.
James C. Bohl, Baraboo, argued, for respondents Century 21 Blackmon Realty, Inc., and Richard Blackmon; Quale, Hartmann, Bohl & Evenson, Baraboo, on brief.
W. John Pritchard, Milwaukee, for defendants-respondents and cross-appellants.
Before GARTZKE, P.J., and DYKMAN and EICH, JJ.
Mac and Patricia McDonald appeal from a judgment on a verdict finding that Century 21 Real Estate Corporation, Century 21 Real Estate of the Midwest, Inc., Century 21 Blackmon Realty, Inc., and real estate agents Richard Blackmon and Jane Franzen negligently performed a listing contract with the McDonalds. The issues are: (1) whether the jury instruction on damages recoverable in tort was erroneous; and (2) whether the court erred in failing to increase the tort damage award to an amount consistent with the amount awarded under the McDonalds' contract claim against other defendants; and (3) whether the McDonalds have proven a claim in tort, an issue raised by Century 21's cross-appeal. Because we conclude the McDonalds have not proven a tort claim, we reverse and vacate the award of tort damages without reaching the other issues raised on appeal.
In early 1980 the McDonalds entered a listing contract with Century 21 Blackmon Realty, Inc. of Sauk City to sell the McDonalds' substantially completed 24-room home and adjoining lot. The house is unusual. Most rooms open on the sizeable indoor pool. The house and lot were listed at $130,000. The contract provided that the realtor would "prequalify" all prospective buyers. "Prequalify" was not defined, and the parties dispute its meaning.
In August 1980, Douglas Larson contacted Blackmon's agent, Jane Franzen, to view the McDonald home. Larson represented himself as president of Agrico Lease, Inc., which he described as a large agricultural equipment lease broker.
Larson viewed the home on two occasions. Agrico subsequently made a purchase offer of $90,000. The McDonalds were dissatisfied with the offer but, on Franzen's advice, did not reject it. Instead, Franzen arranged a meeting between Larson and Mac McDonald. That meeting resulted in executed purchase contracts for the lot and house for a total price of $100,000. Financing was to be by land contract.
Believing the house sold, the McDonalds began developing another lot and laying the foundation for their new home. In order to complete as much of the job as possible before closing, Mac McDonald took all of the workers from his contracting business off existing jobs and put them to work at the new home site.
In mid-September, Larson notified Blackmon that Agrico did not intend to go through with the purchase. When Blackmon notified the McDonalds of this turn of events, Mac McDonald began looking into the backgrounds of both Larson and Agrico. He discovered that Larson had a large number of civil judgments entered against him and one criminal conviction. He also found that Agrico had not registered with the Wisconsin Secretary of State until after the McDonalds had accepted its offers to purchase.
Closing was scheduled for October 15, 1980 at the Blackmon Agency's offices. Douglas Larson's father, Al Larson, appeared on behalf of Agrico and refused to close because of alleged defects in the property. 1 As a result, the McDonalds claim they were unable to pay obligations incurred in the construction of their new home, were unable to undertake new contracting jobs, and suffered damage to their credit reputation.
The McDonalds brought suit against Agrico, Douglas Larson, Al Larson, Century 21 Blackmon Realty, Inc., Richard Blackmon, Blackmon agent Jane Franzen, and the parent Century 21 Corporations, alleging they were vicariously liable for the Agrico defaulted at trial. The jury returned a special verdict finding the realtors negligent in the manner in which they represented the McDonalds, and awarded $15,000 damages. The jury also found that Agrico had breached the purchase contracts, and awarded contract damages of $100,000. The McDonalds appeal. Century 21 Real Estate Corporation and Century 21 Real Estate of the Midwest, Inc., cross-appeal.
acts and omissions of the local agency. 2 The complaint against Agrico and the Larsons alleged breach of the purchase contracts. The complaint against the realtors set out claims in both breach of contract and negligence based upon an alleged failure to "prequalify" Agrico and Larson. A few days before trial, the McDonalds elected to proceed against the realtors only on a tort theory
We first address the cross-appeal because if cross-appellants prevail, the McDonalds' issues become moot.
The McDonald complaint alleges that: "Century 21-Blackmon Realty, Inc., Richard Blackmon and Jane M. Franzen, did each act in a careless and negligent fashion in the manner in which they failed to pre-screen Agrico Lease, Inc., Douglas Larson and Al Larson before allowing these latter defendants to enter into the offers to purchase...." "Pre-screening" apparently refers to the prequalification term of the listing contract.
Wisconsin does not recognize an inherent cause of action for every negligent performance of a contractual obligation. 3 (Citation omitted.) Dvorak v. Pluswood Wisconsin, Inc., 121 Wis.2d 218, 220 358 N.W.2d 544, 545 (Ct.App.1984). " 'The principle which seems to have emerged from the decisions in the United States is that there will be liability in tort for misperformance of a contract whenever there would be liability for gratuitous performance without the contract....' " Landwehr v. Citizens Trust Co., 110 Wis.2d 716, 723, 329 N.W.2d 411, 414 (1983), quoting W. Prosser, Handbook of the Law of Torts, sec. 92, at 617-18 (4th ed.1971).
There has been continuing confusion in the law as to the question of whether a breach of contract is actionable in tort. Landwehr, 110 Wis.2d at 720, 329 N.W.2d at 413. The common law has evolved to recognize differences between civil actions for breach of contract and for tort. Causes of action in tort and contract have historically had different purposes and protected different interests.
However, the McDonalds argue that the law of Wisconsin is that "the negligent performance or nonperformance of a duty created by a contract may constitute actionable negligence," Presser v. Siesel Construction Co., 19 Wis.2d 54, 59, 119 N.W.2d 405, 408 (1963), and that the contract We think the more recent cases, like Dvorak and Landwehr, better state the law by differentiating between duties imposed by the law and obligations assumed under contract. 4 "[T]orts consist of the breach of duties fixed and imposed upon the parties by the law itself, without regard to their consent to assume them.... " (Emphasis added.) W. Prosser, W. Keeton, Prosser and Keeton on The Law of Torts, sec. 1, at 4 (5th ed.1984). 5 5 Where a tort duty coincides with an obligation undertaken via contract, either a contract or a tort action will lie for its breach. Id. at sec. 1, at 5. Nowak v. Transport Indemnity Co., 120 Wis.2d 635, 639, 358 N.W.2d 294, 297 (Ct.App.1984). Because the McDonalds have not pressed a...
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