Renschler Co. v. Counter

Decision Date23 May 2013
Docket NumberNo. 2012AP2094.,2012AP2094.
Citation348 Wis.2d 763,833 N.W.2d 873,2013 WI App 84
CourtWisconsin Court of Appeals
PartiesThe RENSCHLER COMPANY, INC., Plaintiff–Counter Defendant–Appellant, v. MSA PROFESSIONAL SERVICES, INC. and Continental Casualty Company, Defendants–Counter Claimants–Third–Party Plaintiffs–Respondents, v. Cotton Mill Commons, LLC and C & M Construction Services, LLC, Third–Party Defendants.

OPINION TEXT STARTS HEREAppeal from a judgment of the circuit court for Dodge County: John R. Storck, Judge. Affirmed.

Before SHERMAN, BLANCHARD and KLOPPENBURG, JJ.¶ 1KLOPPENBURG, J.

This case involves a proposed development project in the City of Beaver Dam by The Renschler Company and other developers.1 Renschler contracted with MSA Professional Services, Inc., for MSA to provide certain professional engineering services for the project. The proposed development did not proceed as planned, and Renschler filed this action against MSA, alleging negligence and breach of contract. After a seven-day trial, the jury found that MSA was not negligent and did not breach its contract with Renschler. Renschler appeals the judgment, arguing that: (1) the special verdict form improperly included the City of Beaver Dam as an entity to which the jury could apportion negligence; (2) the jury's verdict finding that MSA did not breach its contract with Renschler was contrary to the great weight and clear preponderance of the evidence; (3) the court erred in barring Renschler's claims for damages from lost profits and lost opportunities; and (4) under the terms of their contract, MSA is responsible for Renschler's attorneys' fees and costs. We affirm for the reasons set forth below.

BACKGROUND

¶ 2 The following facts were presented at trial and are not in dispute on appeal. In 2006, Renschler sought to develop certain properties in the downtown area of the City of Beaver Dam. The properties to be developed included an industrial building formerly owned by the Weyenberg Shoe Company and now owned by the City (the Weyco property), two former automobile dealership properties, and a former hotel known as the Milwaukee House.

¶ 3 Renschler submitted an offer to purchase the Weyco property from the City, and the City agreed to sell the property “as is” for one dollar. The accepted offer to purchase agreement incorporated by reference a development agreement between the City and Renschler. Under the heading “Conditions of Property Conveyance,” the development agreement stated:

The developer will acquire title to the vacant former auto dealership properties and the former “Milwaukee House” property located across the street from the “Weyenberg Shoe Factory” property prior to or simultaneously with the closing for the Weyenburg [sic] Shoe Factory Property....

....

Notwithstanding any provision in this agreement to the contrary, in the event the Developer does not acquire all of the combined acquired properties prior to July 31, 2007, the parties agree that this agreement shall be null and void and Developer shall have no [taxable fair market value] guarantee obligation. (Emphasis in original.)

¶ 4 In May 2007, Renschler contracted with MSA, a professional engineering firm, to perform a number of services, including determining potential effects of the nearby Beaver Dam River and dam on the development of the properties. Specifically, MSA agreed to perform a Phase I Environmental Site Assessment and related services for certain properties, including the Weyco property.

¶ 5 In May 2007, Mike Laue, a professional engineer with MSA, went to the City of Beaver Dam's Building Inspection Services Department to retrieve “all the pertinent information” related to flood-elevation levels for the Weyco property. Laue received copies of the City's floodplain ordinance and two FEMA (Federal Emergency Management Agency) maps referenced in the ordinance. MSA followed up with field work and created a topographic survey (mapping) that incorporated data from its own field work and the FEMA maps, to show, among other things, the flood-elevation levels for the property. On May 29, 2007, Laue e-mailed Renschler, reporting that a “preliminary review” of the topographic survey showed that the Weyco property's ground floor was above the FEMA flood-elevation levels.

¶ 6 On June 7, 2007, Laue sent Renschler MSA's “preliminary topography survey.” In an accompanying letter, Laue wrote: “Note the location of the flood elevation as per the Federal Emergency Management Agency as it does NOT come in contact with the existing shoe factory building, but stays in the area between the building and the river's edge.” Laue testified at trial that he believed that at that time MSA's services were complete, because MSA had “put together the work product” directed by Renschler.

¶ 7 The Renschler–City development agreement, as excerpted in paragraph three above, required that Renschler close on its purchase of the project's properties prior to July 31, 2007. Renschler requested an extension of the closing date, because it “needed additional time to complete the due diligence on the project.” The City agreed to move the closing deadline to December 31, 2007.

¶ 8 On December 12, 2007, at the direction of Renschler, Laue forwarded to the City's Building Inspection Services Department information related to the FEMA flood-elevation levels near the Weyco property. Laue had not submitted the information previously because Renschler instructed Laue not to release any of MSA's survey information unless directed to do so by Renschler.

¶ 9 On December 27, 2007, Laue received a phone call from an employee of the City's Building Inspection Services Department, indicating that the department had additional information pertinent to the project. Laue immediately went to the department and was given a copy of a “dam failure analysis” performed in 1989. A dam failure analysis predicts anticipated water-elevation levels if a dam structure is washed out as a result of an extreme flooding event.

¶ 10 The next day, December 28, Laue met again with employees from the City's Building Inspection Services Department to determine whether the dam failure analysis predicted an effect on the properties at issue. One of the City employees indicated that, in light of the dam failure analysis, he believed that any building permits would require approval from the state Department of Natural Resources. After the meeting, Laue e-mailed Renschler about the dam failure analysis and his conversations with the City's Building Inspection Services Department, attaching an explanatory letter and other documents. Laue summarized the “critical water elevations and how they relate[d] to the [Weyco] building.” Laue explained that the dam failure analysis predicts water-elevation levels approximately six-and-one-half feet higher than the FEMA elevations on which he had relied in his May and June correspondence to Renschler. Laue further explained that “it appears that building modification permits will not be issued by the local inspection department without some type of sign-off from the DNR.”

¶ 11 Renschler attempted to close sales on the three privately-owned properties on December 28 and 31, 2007. The December 28 closing was not completed due to issues concerning subordination and a missing mortgage satisfaction. Renschler reconvened with the title company on December 31. Immediately thereafter, Renschler met with the City Attorney to close on the Weyco property. The City Attorney testified that Renschler represented to her that it had just successfully closed on the private properties. Renschler and the City then closed on the Weyco property and executed a warranty deed.

¶ 12 On January 2, 2008, the City Attorney was informed by the title company that handled the attempted private property closings that Renschler had not closed on the properties. The City Attorney wrote a letter to Renschler's attorney stating that the development agreement, the sale of the Weyco property, and all other documents related to the project were null and void. In substance, the City took the position that Renschler had not met the development agreement's extended deadline of December 31, 2007, for acquiring title to the project properties.

¶ 13 Renschler filed a lawsuit against MSA, bringing claims for professional negligence and breach of contract. Renschler sought damages, “including but not limited to lost profits, lost opportunity costs, and attorneys' fees and costs.” The circuit court granted MSA's pretrial motion in limine, barring Renschler from claiming damages from lost profits or lost opportunities. The circuit court also granted MSA's pretrial motion for declaratory judgment, ruling that MSA was not liable, under the Renschler–MSA contract, for Renschler's attorneys' fees and costs in litigating this action, if Renschler was successful.

¶ 14 The case proceeded to a seven-day jury trial. Renschler's trial theory was that MSA was professionally negligent and breached the contract by failing to discover the dam failure analysis until December 2007, which caused the project's termination and damages to Renschler. Conversely, MSA's trial theory was that the project failed due to Renschler's failure to acquire title to the three properties by December 31, 2007, a contingency to the Weyco property sale under Renschler's development agreement with the City.

¶ 15 The circuit court prepared the special verdict form, which allowed the jury to apportion total negligence among MSA, Renschler, and the City's Building Inspection Services Department. The jury returned a verdict finding that MSA was not negligent and did not breach its contract with Renschler. The jury further found that Renschler breached its contract with MSA with respect to the payment of MSA's fees for services rendered on the project and awarded MSA $3,924.50. The circuit court subsequently denied Renschler's motion for a new trial. Renschler now appeals.

DISCUSSION

¶ 16 On appeal,...

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