Mortag v. Soroosh, No. 2007AP1669 (Wis. App. 12/2/2008)

• Decision Date: 02 December 2008
• Docket Number: No. 2007AP1669.,2007AP1669.
• Parties: Suzy Mortag, Plaintiff-Appellant, v. Edward Soroosh, d/b/a Pinewood Builders, Pinewood, Inc. and Alias Insurance Company No. 1, Defendants-Respondents.
• Court: Wisconsin Court of Appeals

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Suzy Mortag, Plaintiff-Appellant, v. Edward Soroosh, d/b/a Pinewood Builders, Pinewood, Inc. and Alias Insurance Company No. 1, Defendants-Respondents.

No. 2007AP1669.

Court of Appeals of Wisconsin, District III.

Opinion Filed: December 2, 2008.

APPEAL from a judgment of the circuit court for Vilas County: NEAL A. NIELSEN, III, Judge. Affirmed.

Before Hoover, P.J., Peterson and Brunner, JJ.

¶ 1 PER CURIAM.

Suzy Mortag appeals a judgment arising out of a dispute over a home improvement project. Mortag contends the circuit court erred by denying her motion for judgment notwithstanding the verdict. Mortag insists Edward Soroosh, d/b/a Pinewood Builders, and Pinewood, Inc. (collectively, "Soroosh"), committed an unfair trade practice as a matter of law, thereby entitling her to double damages and attorney fees. We disagree and affirm the judgment.

¶ 2 Mortag and Soroosh entered into a "Rehabilitation Contract" whereby the Ashland County Housing Authority financed three basic areas of work on Mortag's home: a new roof, new siding, and interior work. Ultimately, in conjunction with requests for payment to the housing authority, both Soroosh and Mortag signed certifications stating:

I hereby certify that the date reported above is correct, rehabilitation work has been performed in a satisfactory manner and in full compliance with the contract, and the amount requested is justified by the work which has been completed.

¶ 3 The housing authority inspector testified that when he inspected the project, "The quality of the work wasn't the best I have seen ... but it was passable." The housing authority subsequently paid Soroosh the full contract price.

¶ 4 Mortag alleged that shortly after the final payment, the roof started leaking. Mortag also complained about the siding and other problems. Mortag subsequently commenced an action against Soroosh, alleging breach of contract and violations of WIS. ADMIN. CODE ch. ATCP 110, the Home Improvement Practices Code.¹ The matter went to a jury trial. At trial, Mortag requested $42,745.06 in breach of contract damages, and the jury awarded $7,823.²

¶ 5 Also at issue at trial were Mortag's allegations of unfair trade practices under WIS. ADMIN. CODE ch. ATCP 110. Several separate questions on the special verdict asked whether Soroosh violated ch. ATCP 110. As relevant to this appeal, Mortag alleged Soroosh was paid for drywall work he did not intend to provide or which he knew would not be provided according to the terms of the contract, thereby violating § ATCP 110.02(7)(b).³ The jury concluded that Soroosh did not violate the code.

¶ 6 Mortag brought a motion for judgment notwithstanding the verdict, contending that the verdict was internally inconsistent. Mortag asked the circuit court to rule that Soroosh violated WIS. ADMIN. CODE § ATCP 110.02(7)(b) as a matter of law with regard to the interior work, thereby entitling her to double damages and reasonable attorney fees under WIS. STAT. § 100.20(5). The circuit court denied the motion.⁴ This appeal followed.

¶ 7 WISCONSIN ADMIN. CODE § ATCP 110.02(7)(b) provides:

ATCP 110.02 Prohibited Trade Practices. No seller shall engage in the following unfair methods of competition or unfair trade practices:

....

(7) ....

(b) Solicit or accept any payment for home improvement materials or services which the seller does not intend to provide according to the terms of the home improvement contract, or which the seller has reason to believe will not be provided according to the terms of the contract. (Emphasis added.)

¶ 8 Mortag contends that Soroosh admitted at trial the elements of WIS. ADMIN. CODE § ATCP 110.02(7)(b).⁵ First, Soroosh entered into a home improvement contract under which he was to perform interior work, among other things. Second, Soroosh testified he requested and accepted payment for interior work that he knew Rick's Drywall in fact provided, and for which he knew Mortag paid Rick's Drywall separately. In addition, Mortag contends that "in closing argument, Edward Soroosh's counsel admitted that Edward Soroosh owed Suzy Mortag $ 800 based on all of this."

¶ 9 However, Mortag concedes that Wis. Admin. Code § ATCP § 110.02(7)(b) specifically refers to intent. Mortag nevertheless claims that intent "is not an element of liability under § ATCP 110.02," citing our decision in Stuart v. Weisflog's Showroom Gallery, Inc., 2006 WI App 184, ¶29, 296 Wis. 2d 249, 722 N.W.2d 766. Mortag's reliance on Stuart is misplaced for several reasons.

¶ 10 First, Mortag misquotes our decision in Stuart.⁶ More importantly, our decision in Stuart was reversed by our supreme court in Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 86, 753 N.W.2d 448 ("Stuart II"). Finally, as Mortag acknowledges, Stuart involved the interpretation of WIS. ADMIN. CODE § ATCP 110.02(11), dealing with misrepresentations, which is not an issue in the present appeal.

¶ 11 Mortag nevertheless insists, "If a wrongful intent to deceive is not required to find a violation of the general misrepresentation section of WIS. ADMIN. CODE § ATCP 110.02, it seems certain that such a wrongful intent to deceive is also not required to find that Edward Soroosh violated ATCP § 110.02(7)(b)." We reject Mortag's argument that Stuart requires a finding as a matter of law that Soroosh violated § ATCP 110.02(7)(b).

¶ 12 Mortag fails to provide a sufficient basis to conclude that Soroosh violated WIS. ADMIN. CODE § ATCP 110.02(7)(b) as a matter of law. Here, it is undisputed the special verdict questions were proper as to form. We conclude the court appropriately determined there was enough evidence to give the questions to the jury. Soroosh testified that Rick's Drywall was brought in to do interior work and "it developed into where they were going to do the whole thing." Soroosh testified he paid Rick's Drywall for paint and intended to pay Rick's Drywall the remainder owed for the interior "when he was through." Soroosh testified the interior work was never finished by Rick's Drywall. Whether Soroosh accepted payment for services he did not intend to provide, or had reason to believe would not be provided, according to the terms of the contract was a question that was properly answered by the jury as fact-finder.⁷

¶ 13 Because we conclude that Mortag was not entitled to judgment notwithstanding the verdict as a matter of law, we need not reach the issues of double costs and reasonable attorney fees under Wis. Stat. § 100.20(5). See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663 (1938...