Winger v. Winger

• Decision Date: 15 April 1996
• Docket Number: No. 95-3076,95-3076
• Citation: 82 F.3d 140
• Parties: Michael J. WINGER, Plaintiff-Appellee, v. Susan M. WINGER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 140

82 F.3d 140

34 Fed.R.Serv.3d 1057

Michael J. WINGER, Plaintiff-Appellee, v. Susan M. WINGER, Defendant-Appellant.

No. 95-3076.

United States Court of Appeals Seventh Circuit.

Argued Feb. 6, 1996.

Decided April 15, 1996.

Appeal from the United States District Court for the Western District of Wisconsin. No. 94 C 731--Barbara B. Crabb, Judge.

Richard L. Bolton (argued), James R. Cole, Sandra L. Tarver, Quarles & Brady, Madison, WI, for Plaintiff-Appellee.

Stephen Morgan (argued), Jane F. Zimmerman, Murphy & Desmond, Madison, WI, for Defendant-Appellant.

Before ESCHBACH, KANNE and EVANS, Circuit Judges.

ESCHBACH, Circuit Judge.

This case is a prime example of the reason for the oft-repeated but seldom heeded aphorism: Never do business with your family. Plaintiff-Appellee Michael Winger ("Plaintiff") filed a suit against his sister, Defendant-Appellant Susan Winger ("Defendant"), in Oneida County, Wisconsin Circuit Court, seeking to enforce an oral agreement affecting an interest in real estate. Defendant removed the case to the U.S. District Court for the Western District of Wisconsin, on the basis of diversity jurisdiction, where the parties tried the case before a jury. The jury returned a verdict in favor of Plaintiff on a cause of action for intentional misrepresentation and awarded the Plaintiff $46,877 in damages. The district court entered judgment consistent with the jury's verdict and denied Defendant's motions for judgment as a matter of law or, in the alternative, for a new trial. Defendant appeals from the district court's denial of these motions. Defendant filed a timely notice of appeal and we have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.

I.

At the times relevant to this action, Plaintiff was self-employed in the construction industry. Plaintiff's enterprise, M & R Ventures ("M & R"), began construction of a residence at 9732 Milky Way Road in Minocqua, Wisconsin (the "Milky Way property"). Plaintiff requested that Defendant accept employment at one of Plaintiff's other enterprises, Advanced Concrete Pumping, Inc. ("ACP"). Defendant accepted the job, and moved to the Minocqua, Wisconsin area to begin work. Defendant also decided to purchase the Milky Way property, which was jointly owned by Plaintiff and Plaintiff's partner (and brother) Rick Winger.

At trial, the two parties agreed that there had been an agreement for the purchase of the Milky Way property, but they disagreed about the substance of that agreement. Plaintiff testified that the total agreement was for $110,000, plus certain extra costs associated with completing construction of the house. Plaintiff's brothers, Rick and John Winger, also testified that the deal was for $110,000, plus certain extras. Defendant's realtor and Plaintiff's accountant both testified that Defendant acknowledged that the price for the Milky Way property was $110,000 at a meeting in March or April, 1994.

Defendant disputed the $110,000 figure and contended that the agreement was for $54,900. Defendant sought to support her position by relying on the documents evidencing the purchase of the Milky Way property. In particular, Defendant relied on a $70,000 purchase figure contained in the documents executed at closing (hereinafter referred to as the "Amendment to Offer to Purchase"). Defendant contended that this figure covered the entire transaction--a $54,900 purchase price plus $15,100 for Defendant to loan to ACP.

Plaintiff responded that the $70,000 purchase figure contained in the "Amendment to Offer to Purchase" represented only a portion of the entire agreement, none of which included a loan from Defendant to ACP. Plaintiff agreed to defer some of the purchase price until a later date when the property would be sold to a third party because Defendant did not have the financial means to obtain a mortgage for the entire $110,000 purchase price. Defendant and Plaintiff executed the offer to purchase and a warranty deed at the time of closing out of necessity as dictated by commercial lending practices. In fact, Defendant obtained the Milky Way Property with partial bank financing and no down payment. The bank that provided the financing appraised the house in an unfinished condition at $120,000.

Although the house was still under construction at the time of the closing on May 10, 1994, the parties did not incorporate the construction specifications into the offer. Plaintiff, nevertheless, continued to work on the house after closing. Plaintiff made changes to the specifications at the behest of Defendant and charged Defendant $6,877 for labor and materials. In late May and early June 1994, Plaintiff and Defendant had a falling out. Defendant terminated her employment at ACP, left Minocqua, and listed the house for sale. On July 27, 1994, Plaintiff filed suit, seeking to enforce an alleged oral contract with his sister for sale of the Milky Way Property at $110,000. The Milky Way property was subsequently sold by Defendant for $126,000 and the net proceeds from Defendant's sale of $46,273.96 were deposited into escrow pending resolution of the lawsuit. Defendant alleged as an affirmative defense that Plaintiff's claim violates the statute of frauds as set forth in Wis. Stat. §§ 706.01, 706.02(1). Prior to trial, Defendant also moved in limine to exclude evidence of an oral agreement as parol evidence.

The district court decided as a matter of law that no written document embodied the agreement that Defendant thought that she had made or that Plaintiff thought that he had made for the Milky Way Property. Based on the evidence presented at trial and the jury instructions offered by the parties, the district court instructed the jury on both a breach of contract cause of action and an intentional misrepresentation cause of action.

The jury found that Defendant agreed, by oral agreement, to pay at least $110,000 for the Milky Way property, that she intentionally misrepresented that she would pay at least $110,000 for the property, and that Plaintiff reasonably relied on those misrepresentations to his detriment. The price was to cover the purchase of the property and completion of construction of the house. The finding was supported by the evidence and testimony presented at trial. The jury awarded $46,877 as damages for the intentional misrepresentation claim but the court did not ask the jury to determine the amount of damages for the breach of contract claim. After the jury returned its verdict, Defendant moved the district court for judgment as a matter of law or, in the alternative, for a new trial. The district court denied both motions.

II.

Defendant appeals the district court's denial of her motion for judgment as a matter of law and her motion for a new trial. We review de novo a district court's denial of a motion for judgment as a matter of law under Fed.R.Civ.P. 50(b), applying the same standard that the district court applied. Sokol Crystal Products v. DSC Communications, 15 F.3d 1427, 1432 (7th Cir.1994). The district court applies the state law standard in deciding the motion. Under Wisconsin law, a motion for judgment notwithstanding the verdict pursuant to Wis.Stat. § 805.14, admits for the purposes of the motion that the findings are true, but asserts that judgment should be granted the moving party on grounds other than those decided by the jury. Kolpin v. Pioneer Power & Light, 162 Wis.2d 1, 28, 469 N.W.2d 595, 606 (1991). Therefore, we consider all credible evidence and reasonable inferences in the light most favorable to the non-moving party.

In reviewing a motion for a new trial under Fed.R.Civ.P. 59(a), the district court must determine whether "the verdict is against the weight of the evidence, the damages are excessive, or if for other reasons the trial was not fair to the moving party." McNabola v. Chicago Transit Authority, 10 F.3d 501, 516 (7th Cir.1993). We review the district court's denial of a motion for new trial for abuse of discretion. M.T. Bonk Co. v. Milton Bradley Co., 945 F.2d 1404, 1407 (7th Cir.1991).

III.

Defendant makes three arguments in support of her theory that the district court erred in denying her motion for judgment as a matter of law and her motion for a new trial. She argues that the court erred by allowing the jury to decide an intentional misrepresentation claim because Plaintiff did not plead such a claim. Second, she argues that the statute of frauds should have been applied to bar Plaintiff's claim. Third, she argues that the court erred in admitting parol evidence to support an oral contract in conflict with a valid written contract. We address each of these arguments separately.

A.

Defendant takes the position that the Plaintiff's cause of action for intentional misrepresentation should not have been submitted to the jury because Plaintiff did not plead such a cause of action and Plaintiff did not move the court to amend his pleadings to include such a cause of action. In other words, Defendant believes that this was a case of "trial by ambush." In support of her position, Defendant notes that Rule 9(b) of the Federal Rules of Civil Procedure requires a party to plead fraud with particularity. Fed.R.Civ.P. 9(b); cf. Wis.Stat. § 802.03(2).

The flaw in Defendant's position is that she did not object to the proposed jury instructions or the admission of evidence of intentional misrepresentation on the grounds that it was outside the issues of the pleadings. As the district court noted, "Defendant never made any objection to allowing plaintiff's tort claims to go to the jury." In fact, Defendant, by her own admission, was put on notice of the claim for intentional misrepresentation approximately two weeks prior to trial when Plaintiff submitted his proposed jury instructions. Included among those instructions were instructions on intentional misrepresentation. Defendant also participated, at the conclusion of the presentation of evidence, in a jury...