Roberts Premier Design Corp. v. Adams

• Decision Date: 28 July 2021
• Docket Number: Appeal No. 2019AP1706
• Parties: ROBERTS PREMIER DESIGN CORP., Plaintiff-Appellant, v. Jeff ADAMS and Kelly Adams, Defendants-Third-Party Plaintiffs-Respondents, v. John M. Roberts, Third-Party Defendant-Appellant.
• Court: Wisconsin Court of Appeals

399 Wis.2d 151

963 N.W.2d 796

2021 WI App 52

ROBERTS PREMIER DESIGN CORP., Plaintiff-Appellant,^†

v.Jeff ADAMS and Kelly Adams, Defendants-Third-Party Plaintiffs-Respondents,

v.John M. Roberts, Third-Party Defendant-Appellant.^†

Appeal No. 2019AP1706

Court of Appeals of Wisconsin.

Submitted on Briefs: September 10, 2020

Opinion Filed: July 28, 2021

On behalf of the plaintiff-appellant and third-party defendant-appellant, the cause was submitted on the briefs of Todd A. Terry of Guttormsen, Terry & Nudo, LLC, Kenosha.

On behalf of the defendants-third-party plaintiffs-respondents, the cause was submitted on the brief of Lisle W. Blackbourn and Janel Bergsbaken of Godfrey, Leibsle, Blackbourn & Howarth, S.C., Elkhorn.

Before Reilly, P.J., Gundrum and Davis, JJ.

DAVIS, J.

¶1 This appeal arises out of a home construction dispute. The contractor, Roberts Premier Design Corp. (Premier Design) sued homeowners Jeff and Kelly Adams for nonpayment. The Adamses, in turn, counterclaimed against Premier Design and joined its owner, John Roberts, bringing claims for theft by contractor and/or breach of contract. Shortly before the scheduled trial, Roberts was criminally charged for the same conduct alleged in the Adamses’ civil suit. This led to a number of trial court rulings that Premier Design and Roberts (collectively, Appellants) now challenge on appeal. Before we reach those issues, however, we must address the more fundamental question of whether appeal rights are barred. That question arises because these issues come to us as an appeal from a stipulated judgment in the amount of $800,000, entered into pursuant to a settlement agreement.

¶2 The Adamses argue that, by stipulating to the judgment from which this appeal is taken, Appellants waived their right to appeal the issues they now raise. We agree. The settlement agreement purported, on its face, "to resolve the Lawsuit without the need for further litigation," and it gave no indication that either party was reserving any right to appeal the stipulated judgment. Such an unqualified expression of intent cannot be considered anything other than a waiver of appeal rights. Accordingly, we dismiss this appeal.

BACKGROUND

¶3 Premier Design is a design and construction company; Roberts is its registered agent, president, and sole shareholder. In August 2014, the Adamses contracted with Premier Design to remodel their home. Construction began but stalled. In January 2017, Premier Design filed suit for breach of contract,¹ seeking amounts allegedly owed under the contract and two change orders. The Adamses counterclaimed for breach of contract, alleging that Premier Design failed to complete the construction project and failed to perform work in a good and workmanlike manner. In December 2018, the Adamses filed a third-party complaint against Roberts personally, bringing claims for breach of contract and theft by contractor under an alter-ego theory of liability. See WIS. STAT. § 779.02(5) (2019-20)² ; Consumer's Co-op of Walworth Cnty. v. Olsen , 142 Wis. 2d 465, 484-86, 419 N.W.2d 211 (1988).

¶4 Two weeks before trial was set to start, Roberts was charged with criminal theft by contractor, based on the conduct alleged in the Adamses’ civil suit. At the trial, and on the claimed advice of criminal counsel, Roberts did not appear. The Adamses argued that Roberts's nonappearance violated a trial subpoena; Roberts's counsel claimed that service of the subpoena was improper. The court determined that Roberts was properly served under WIS. STAT. § 885.03. The court then struck Premier Design's reply to the counterclaim and Roberts's answer to the third-party complaint, and entered default judgments against both appellants. With liability thus established, the court scheduled a trial to determine damages on the Adamses’ claims.

¶5 Premier Design's original claim for breach of contract remained for the impending jury trial. Without Roberts, however, Premier Design had no witness to prove its case, particularly on damages. Premier Design's counsel indicated his intent to establish damages through the Adamses’ expert witness report; the court, however, ruled that this report was hearsay, lacked foundation without a witness, and was inadmissible. Left with no evidence, Premier Design stipulated to the dismissal of its claim with prejudice.

¶6 That left the damages trial on the Adamses’ claims, which the court had scheduled for a bench trial. In the interim, however, the parties reached a settlement agreement, in which Appellants "stipulate[d] and agree[d] to the immediate entry of a Monetary Judgment against them, jointly and severally, in the amount of $800,000.00." The settlement agreement contains no releases, but it does include the following recital language: "The Parties desire to resolve the Lawsuit without the need for further litigation." "Lawsuit" is a defined term, meaning the circuit court case from which this appeal was taken. Attached to the settlement agreement is a form of final judgment, which expressly incorporated the settlement agreement.

¶7 Judgment was entered in accordance with the settlement agreement, and this appeal followed. We will discuss additional facts below, where relevant to our analysis.

DISCUSSION

¶8 Appellants raise a number of issues on appeal. At the outset, however, we must address the Adamses’ argument that Appellants waived their right to appeal by stipulating to the judgment that ended the litigation (the $800,000 monetary judgment on the Adamses’ claims).

¶9 Subsumed within this issue are two separate conceptual points, one jurisdictional, the other a matter of contract law. The jurisdictional question is whether Appellants, by agreeing to the final judgment from which they appeal, are "aggrieved" by that judgment. See Buchberger v. Mosser , 236 Wis. 70, 294 N.W. 492 (1940) ("Where an order is made on stipulation of all the parties to an action, it cannot be appealed because no one is aggrieved."); Weina v. Atlantic Mut. Ins. Co. , 177 Wis. 2d 341, 345, 501 N.W.2d 465 (Ct. App. 1993) ("A person may not appeal from a judgment unless aggrieved by the judgment. A person is aggrieved if the judgment bears directly and injuriously upon his or her interests; the person must be adversely affected in some appreciable manner." (citation omitted)); Lassa v. Rongstad , 2006 WI 105, ¶98, 294 Wis. 2d 187, 718 N.W.2d 673 (Butler, J., concurring) (noting that the requirement in the prior statutory scheme that a party be "aggrieved" by a judgment in order to invoke appellate jurisdiction continues in the current statute; the "aggrieved party" requirement "was considered to merely state a fundamental and well-understood concept upon which standing to appeal was predicated").

¶10 As this authority suggests, there are situations, such as where there are no adverse rulings that precipitated entry of the judgment, where a party might not be "aggrieved" by entry of a consent judgment. But that is not the case here. Appellants had been defaulted on the Adamses’ claims against them, and Premier Design had lost any ability to pursue its own claim as a result of the trial court's ruling excluding its use of the Adamses’ expert report. Appellants meet the requirement that they are aggrieved parties for purposes of appealing those rulings. And although a stipulated judgment certainly precludes appellate review of issues that have not been contested below, we see nothing in the case law that says that a party faced with an adverse dispositive ruling cannot settle any remaining undisputed issues, so as to speedily resolve trial proceedings and narrow the questions for appeal, provided appeal rights are preserved. Lassa , 294 Wis. 2d 187, ¶34, 718 N.W.2d 673 (discussing cases).

¶11 The proviso that appeal rights be preserved goes to the second, and more problematic, conceptual point, that being the agreement the parties reached and whether, by entering into it, they manifested an intent to end any further litigation, including on appeal. If this is what the parties did here, then Appellants—although aggrieved parties—must be deemed to have waived any right to appeal the judgment that resulted from their settlement agreement. To recap, the trial court entered default judgments against both appellants based on Roberts's failure to appear and testify. The court left open the issue of damages, which the parties later resolved through a written settlement agreement permitting entry of a consent judgment. The settlement agreement, which the consent judgment expressly incorporates, holds Premier Design and Roberts jointly and severally liable for $800,000. Neither the settlement agreement nor the consent judgment indicates an intent to preserve appeal rights; to the contrary, the settlement agreement states that it is intended to resolve this case without the need for further litigation. The question now is whether the settlement and consent judgment constitute a waiver of Appellants’ right to challenge any of the rulings that led to the stipulated judgment.

¶12 Were this a mere stipulation as to damages, without more, the answer might be no. During the course of litigation, parties routinely stipulate to some issues, leaving others to be litigated, for reasons ranging from wanting to conserve resources to mitigating risk. See, e.g. , Recycleworlds Consulting Corp. v. Wisconsin Bell , 224 Wis. 2d 586, 603, 592 N.W.2d 637 (Ct. App. 1999) (plaintiff did not waive the right to appeal issues relating to tort claims by stipulating to damages on its contract claims); Strenke v. Hogner , 2005 WI 25, ¶¶7-8, 279 Wis. 2d 52, 694 N.W.2d 296 (parties stipulated to liability but disputed damages). Stipulating to the amount of damages resulting from a contested default falls comfortably within the class of issues that parties may agree to resolve without waiving the right to appeal contested issues. We perceive that this would be true even where the stipulation led to the subsequent final judgment—again, ...