Univest Corp. v. General Split Corp.
| Decision Date | 10 February 1989 |
| Docket Number | Nos. 85-1216,86-1373,s. 85-1216 |
| Citation | 148 Wis.2d 29,435 N.W.2d 234 |
| Parties | UNIVEST CORPORATION, Plaintiff-Respondent-Cross Appellant, v. GENERAL SPLIT CORPORATION, Defendant-Appellant-Cross Respondent-Petitioner. UNIVEST CORPORATION, Plaintiff-Respondent, v. GENERAL SPLIT CORPORATION, Defendant-Appellant-Petitioner. |
| Court | Wisconsin Supreme Court |
Irvin B. Charne, argued, Ronald S. Jacobs, F. Thomas Olson, and Charne, Glassner, Tehan, Clancy & Taitelman, S.C., on brief, Milwaukee, for defendant-appellant-cross respondent-petitioner.
K. Michael Cooley, argued, Timothy J. McDermott, and Whyte & Hirschboeck, S.C., on brief, Milwaukee, for plaintiff-respondent-cross appellant.
This eviction action has been appealed to the court of appeals three times. General Split Corporation (General Split) seeks review of the second of three court of appeals' decisions, dated March 14, 1986, from which it did not initially seek review from this court. General Split also seeks review from the third and most recent court of appeals' decision, dated April 29, 1987, which summarily affirmed a trial court determination that double rental value damages for failure of a tenant to vacate, under sec. 704.27, Stats., included certain utility payments incurred during the holdover period.
We review two issues. First, whether this court in granting a petition for review may consider issues addressed in earlier decisions of the court of appeals in the same case, notwithstanding that review of the earlier decision was not sought. We conclude that although General Split did not petition for review within 30 days of the March 14, 1986, decision, we are not precluded from reviewing the issues determined in that appeal. A timely petition for review of the April 29, 1987, decision was made, bringing the entire record before us. Once the case is before us, it is within our discretion to review any substantial and compelling issue which the case presents.
The second issue is whether the term "rental value" under sec. 704.27 Stats., includes certain utility payments incurred during the holdover period. We conclude that the phrase "rental value" as used in sec. 704.27 is limited to obligations undertaken by the tenant as part of the rental agreement which would necessarily be expected to result in damages because of a holdover, regardless of whether or not the tenant uses the premises. Because General Split was obligated under the lease to purchase utilities only if it actually used such services, the obligation was not of the type which would necessarily be expected to result in damages as the result of a holdover, and was therefore improperly included in the double rental value award. Accordingly, we reverse the damage award and remand for a determination of the correct amount of damages to be assessed.
The underlying history of the litigation is long and involved. The facts necessary for resolution of this appeal are as follows.
General Split is in the leather tanning business, and had two leases ("the 1964 lease" and "the 1969 lease") on two separate properties owned by Univest Corporation (Univest). By virtue of various extensions and new agreements, both leases were set to terminate on June 30, 1984.
In connection with its operations as a tannery, General Split required electricity, water, sewer, and process steam at both locations. The leases contained clauses providing that the lessor agreed to furnish and the lessee agreed to purchase from the lessor all of its requirements of electric current, water, gas, and steam.
General Split also required heat steam at the 1964 leased premises to keep certain tanning oils from congealing. The 1964 lease required Univest to furnish heat steam at its own expense during regular business hours, referred to by the parties as "on hours." General Split, however, provided its own heat for the 1969 leased premises, using heating equipment which it installed on that property.
In November of 1982, Univest sent letters to General Split terminating both leases, and subsequently brought an eviction action. General Split answered, asserting two counterclaims and nine affirmative defenses.
After one appeal to the court of appeals, the trial court eventually awarded judgment of eviction to Univest. The court refused to consider parol evidence offered by General Split in support of its affirmative defenses. The court found that the entire agreement between the parties was contained in the leases, and the parties intended that the leases embodied their entire agreement. Thus, the court concluded that the parol evidence rule barred the consideration of the evidence allegedly explaining or altering the contractual obligations of the parties.
The court then awarded Univest a portion of the damages claimed, but rejected Univest's arguments that double rental value damages were applicable under sec. 704.27, Stats., for the period of the holdover. The trial court also denied prejudgment interest, concluding that the claim was not liquidated.
General Split appealed from that judgment and Univest cross-appealed, resulting in the court of appeals' decision dated March 14, 1986. The judgment of eviction was affirmed. The court of appeals concluded that the trial court properly refused to consider the parol evidence allegedly in support of General Split's affirmative defenses. Regarding the cross-appeal, the court concluded that the trial court erred in failing to award Univest double rental damages under sec. 704.27, Stats. The court also concluded that Univest was entitled to prejudgment interest. The matter was therefore again remanded to the trial court for a determination of the amount of double rental value damages and prejudgment interest to which Univest was entitled.
Significantly, General Split did not seek review from the March 14, 1986, decision.
On the second remand, the trial court heard further arguments and entered a judgment in Univest's favor in the amount of $1,604,079.46. This judgment included $1,313,664.48 in double rental value damages. The court determined that General Split had remained in possession of both premises until March 31, 1985. However, its possession after June 30, 1984, was with the consent of Univest and pursuant to an agreement between the parties. Therefore, with regard to the 1964 lease, the trial court found that General Split improperly remained as a holdover tenant from November 2, 1982, until June 30, 1984. With regard to the 1969 lease, the trial court found that General Split was a holdover tenant from November 18, 1982, until June 30, 1984.
In assessing double damages the trial court determined that the total "rental value" for the two properties during the holdover periods amounted to $1,315,257.30, of which $152,149.46 was attributable to rent and real estate taxes. The balance of $1,163,107.92 was attributable to process steam, electricity, water, and sewer services. The trial court then doubled the "rental value" for a total of $2,630,514.60. The court credited General Split $1,316,850.10, which General Split had timely paid Univest during the holdover periods for rent, real estate taxes, process steam, electricity, water, and sewer. The difference of $1,313,664.48 was the amount the trial court included as double rental value damages in the judgment.
General Split appealed for the third time to the court of appeals, resulting in the April 29, 1987, decision. General Split argued that the term "rental value" in sec. 704.27, Stats., did not include the amounts awarded for electricity, water, sewer, and steam. General Split also reargued the parol evidence issue and various other issues decided in the first two appeals.
The court of appeals concluded on this third appeal that sec. 704.27, Stats., was unambiguous, and that the term "rental value" included any of the tenant's obligations under the lease. Although the court noted that General Split paid only for the utility services actually used, without correlation to the amount of space leased, it determined that the agreements to pay Univest for the items were nevertheless obligations as that term is used in the statute. The amount of damages was therefore upheld.
The court of appeals rejected General Split's request that it review issues determined in the previous appeals. The court concluded that these matters had become the "law of the case," and were thus binding precedent to be followed in all succeeding stages of the same litigation. The court stated that General Split had presented no compelling reason for departing from that doctrine or for reconsidering their prior decisions.
General Split petitioned this court for review of both the April 29, 1987, decision as well as the March 14, 1986, decision. In granting the petition, we specifically limited the issues to whether the petition for review was timely regarding the March 14, 1986, decision; and the meaning of the phrase "rental value" under sec. 704.27, Stats.
The resolution of these issues involves the interpretation of statutes, which is a question of law. DeMars v. LaPour, 123 Wis.2d 366, 370, 366 N.W.2d 891 (1985). We need not defer to the trial court or the court of appeals when deciding such questions. Id.
We first determine whether this court, in granting a petition for review, may consider issues addressed in earlier decisions of the court of appeals in the same case, notwithstanding that review of the earlier decision was not sought. The March 14, 1986, decision, the "earlier" decision, was adverse to General Split. The decision was also the final decision in that it disposed of the legal issues presented in the court of appeals. See In Interest of A.R., 85 Wis.2d 444, 446, 270 N.W.2d 581 (1978). The decision was therefore reviewable by this court under secs. 808.10 and (Rule) 809.62, Stats.
Univest argues that because General Split did not seek review of the March 14, 1986...
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