Pokorny v. Stastny

• Citation: 186 N.W.2d 284,51 Wis.2d 14
• Decision Date: 04 May 1971
• Docket Number: No. 65,65
• Parties: Jiri POKORNY, Appellant, v. Joseph G. STASTNY, Respondent.
• Court: United States State Supreme Court of Wisconsin

Page 284

186 N.W.2d 284

51 Wis.2d 14

Jiri POKORNY, Appellant, v. Joseph G. STASTNY, Respondent.

No. 65.

Supreme Court of Wisconsin.

May 4, 1971.

This is an action for breach of contract. The proof offered by plaintiff revealed that both the plaintiff and defendant were Czechoslovakians and members of the Czech Free Forces during World War II; they became acquainted while stationed in England in 1940. After the war, defendant came to the United States and plaintiff remained in England where he married and acquired a farm which he operated until 1964. Their acquaintance was renewed by correspondence in 1962.

Plaintiff and his wife visited defendant in this country for three weeks in March, 1964, with a view toward possibly settling here, and during the visit plaintiff investigated various business opportunities.

In 1965 plaintiff liquidated his holdings in England and moved his family to Fontana, Wisconsin, in part upon assurances from the defendant that he would help establish the plaintiff in a business. Upon plaintiff's arrival, however, the defendant was not able to locate plaintiff in a business as he intended, but instead persuaded plaintiff to operate a restaurant to be known as The Colonial Kitchen, which defendant desired to open at Fontana, but could not because of a noncompetitive agreement with a third party. Plaintiff was inexperienced in the restaurant business and his reluctance to undertake this venture was overcome by the defendant's oral promise to make up any losses incurred by plaintiff and to further pay him $5,000 as a service fee for commencing the business.

According to plaintiff's proof, on April 30, 1965, the parties executed a written agreement whereby the plaintiff leased the defendant's restaurant premises and purchased the restaurant equipment thereon. The lease term was for one year with an option for renewal, and the agreement further provided that the defendant would repurchase the equipment then on the premises for $15,000, should the plaintiff leave the business. Plaintiff and his wife also testified that defendant orally promised to purchase any additional equipment which plaintiff acquired during the time he operated the business; and that defendant told plaintiff he could move out at any time he desired.

The Colonial Kitchen was opened in May, 1965, and at the end of June the business was already losing money. When plaintiff reported the matter to defendant, defendant assured him he would stand behind him. Meanwhile plaintiff began looking for another business and in July purchased a restaurant and hotel operation in Walworth known as the Wayside Inn. On July 31st plaintiff informed defendant of his new business venture, and advised defendant that plaintiff would leave the Colonial Kitchen at the end of August. The plaintiff requested his money back.

On September 2, 1965, defendant paid plaintiff $14,300 for the original equipment, which figure was arrived at by deducting $700 for rent allegedly owed defendant which had not been paid. Plaintiff testified that defendant also agreed to pay another $5,000 for additional equipment and fixtures which the plaintiff left on the premises, and that defendant promised to pay him the $5,000 service fee and compensate him for his losses as soon as defendant could sell the business. In addition, another witness present at a meeting of plaintiff, plaintiff's wife, and defendant testified that defendant told plaintiff he would compensate plaintiff for business losses incurred while plaintiff operated the Colonial Kitchen.

In December, 1965, defendant paid an additional $4,000 to plaintiff for the additional fixtures and a release was executed by plaintiff with respect to the claim for fixtures. On December 30, 1965, plaintiff, by his attorney, notified defendant that defendant still owed plaintiff approximately $2,000: $100 for overassessment of rent due ($700 when it should have been $600); $275 for a kitchen fixture expressly excluded on the release; $500 for meals furnished defendant and his family at the Colonial Kitchen; and $850 in wages for services rendered by plaintiff as a bartender.

On April 1, 1966, defendant's attorney notified plaintiff's attorney that defendant felt plaintiff was entitled to only $375 and would pay no more. On April 22nd, plaintiff's attorney wrote defendant's attorney that he had discussed the matter with plaintiff and that if defendant would pay the $375 plus $350.32 for two antique lamps which plaintiff purchased and had renovated at defendant's direction in England in 1964, then 'we can, for once and for all, dispose of the differences between these people.' Plaintiff's attorney further expressly stated that plaintiff and his wife were giving up their claims for the meals and bartending wages.

On May 9th, Mr. and Mrs. Pokorny executed the following release:

'FOR AND IN CONSIDERATION of the sum of Seven Hundred Twenty Five and 32/100 ($725.32) Dollars, receipt of which is hereby acknowledged by the undersigned, said undersigned parties, for themselves, their heirs, executors and assigns, do hereby release and wholly discharge JOSEPH G. STASTNY and MARIE M. STASTNY, his wife, their heirs, executors and assigns, from any and all claims of any kind and nature in tort or in equity from the beginning of time to date hereof, including without limiting the generality of the foregoing, any matters relating to the undersigned's rental, operation, maintenance and use of the 'Colonial kitchen."

The instant action was commenced on January 27, 1967, the plaintiff alleging damages in the amount of $12,500, which included business losses, the alleged service fee, and bartending wages. Defendant denied having any contract with plaintiff as alleged, and affirmatively pleaded the release of May 9, 1966, as a defense. Plaintiff then amended his complaint by dropping his claim for bartending wages. At trial the parties stipulated the amount of the business losses to be $2,900.

At trial, in addition to the above facts, plaintiff's attorney at the time of the above collections and settlement, Attorney Frank Hammett of Delavan, testified with respect to the letter of April 22, 1966. He stated that there was no reservation in his mind that the settlement proposed was a 'settlement of all damages of any nature that those parties had against each other.' He further testified that he explained the effect of this release to plaintiff and plaintiff's wife, but that he had no recollection of the details of this explanation. He did testify that had plaintiff expressed any reservation with respect to any claim he felt he had against defendant, he would not have allowed plaintiff to sign the release. However, he stated that he was never directed by plaintiff to make a claim for the business losses, nor was there any specific reference to the business losses during the negotiations on the settlement. He stated he was never informed by plaintiff of the $5,000 service fee claim.

Plaintiff testified that he did mention the business loss agreement to Attorney Hammett, but never authorized him to attempt to collect it because plaintiff did not feel he had it coming until defendant sold the Colonial Kitchen. Plaintiff further testified that at the conference on the release of May 9th, he specifically asked Attorney Hammett if the release had anything to do with the business losses and was told it did not; that Hammett told him the release covered those items he had been authorized to collect. Plaintiff also testified that at the time he signed the release he was aware that someone was operating the Colonial Kitchen, but he was not aware that the defendant had actually sold the business.

Plaintiff's wife testified that she and plaintiff discussed with Attorney Hammett claims against defendant in the amount of $20,000 (original fixtures and the fixtures they later supplied) and also mentioned that they had business losses but that defendant had agreed to pay them as soon as the business was sold. She also testified that she was at all conference between plaintiff and Attorney Hammett and that she never heard plaintiff authorize Attorney Hammett to collect for these business losses; she was aware of no authority given to Attorney Hammett to release these claims. She further testified that at the conference on the release of May 9th, plaintiff still maintained he had a claim for the business losses and so told Attorney Hammett. She stated she was not aware of the contents of any of the correspondence between Attorney Hammett and defendant's attorney, but she was sure that Attorney Hammett was concerned only with 'claims' which he was authorized to collect for plaintiff, and that plaintiff did not feel there was a 'claim' for the business losses or the service fee until the business was sold by defendant.

After the presentation of plaintiff's case, defendant moved for a nonsuit on the basis of the release of May 9th. The motion was granted by the court, concluding that the release was clear and unambiguous, thereby presenting no jury issue. The court concluded that the claims sued upon came within the 'clear and unambiguous' language of the release and were covered by that release.

When judgment was granted dismissing plaintiff's complaint, he appealed.

Braden & English, Lake Geneva, for appellant.

Kenney, Korf & Pfeil, Elkhorn, for respondent.

WILKIE, Justice.

The only real issue presented is whether the trial court erred in nonsuiting the plaintiff. More specifically, the question is whether the determination of the intent of the language of the release presented a jury question as to defendant's alleged liability for plaintiff's claims for a $5,000 service fee and for $2,900 business losses. It did.

The trial court perceived the issue to be whether the release was a complete integration of all the previous negotiations and agreements between the parties. In such a case the intent of the parties is the critical...