PUBLISHED OPINION
Case No.: 96-1220
Complete
Title
of
Case:ANTON F. SCHORSCH
and ANTON F. SCHORSCH, III,
Plaintiffs-Respondents,
v.
JAMES BLADER, CHESTER BLADER, and
LOUISE BLADER,
Defendants,
and
WAUTOMA AREA SCHOOL DISTRICT,
Defendant-Appellant.
Submitted
on Briefs: December 9, 1996
COURT COURT OF
APPEALS OF WISCONSIN
Opinion
Released: March 6, 1997
Opinion
Filed: March
6, 1997
Source
of APPEAL Appeal from a judgment
Full
Name JUDGE COURT: Circuit
Lower
Court. COUNTY: Waushara
(If
"Special" JUDGE: Lewis
W. Charles
so
indicate)
JUDGES: Dykman,
P.J., Roggensack and Deininger, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSFor the defendant-appellant the
cause was submitted on the briefs of Tom Kubasta of Kubasta, Rathjen
& Bickford of Wautoma.
Respondent
ATTORNEYSFor the plaintiffs-respondent the
cause was submitted on the brief of Michael D. Golden of Robinson,
Peterson, Berk & Cross of Appleton and Sarah L. Rudolph of The
Law Offices of Konrad T. Tuchscherer, S.C. of Wausau.
COURT OF
APPEALS DECISION DATED AND
RELEASED March
6, 1997 |
NOTICE |
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 96-1220
STATE OF WISCONSIN IN
COURT OF APPEALS
ANTON
F. SCHORSCH and
ANTON
F. SCHORSCH, III,
Plaintiffs-Respondents,
v.
JAMES
BLADER, CHESTER BLADER,
and
LOUISE BLADER,
Defendants,
and
WAUTOMA AREA SCHOOL DISTRICT,
Defendant-Appellant.
APPEAL
from a judgment of the circuit court for Waushara County: LEWIS W.
CHARLES, Judge. Affirmed in part;
reversed in part and cause remanded with directions.
Before
Dykman, P.J., Roggensack and Deininger, JJ.
ROGGENSACK,
J. The Wautoma Area School District appeals a $35,002.67
damage award, arising from a breach of warranty of title, for land it attempted
to convey. The District claims the
trial court erred when it awarded lost profits and consequential damages for a
breach of warranty of title claim. The
District asserts the damages should have been measured by the portion of the
purchase price which represented the land on which title failed, plus interest
thereon from the date of purchase and the attorney fees and costs of
litigation. In the alternative, the
District requests a new trial on the issue of damages. We conclude that the measure of damages used
by the trial court was not correct.
Therefore, we vacate the damage award, except for the attorney fees and
costs of litigation, and remand to the trial court to make findings of (1) the
fractional part of the purchase price[1]
which the portion of the land to which title failed bears to the whole purchase
price, and (2) the statutory interest thereon from the date of purchase. We affirm the remainder of the judgment. Because of our conclusion about the measure
of damages, we do not reach the District's request for a new trial.
BACKGROUND
On April 30, 1985, Anton
F. Schorsch and his son purchased a schoolhouse and 1.8 acres of land from the
Wautoma Area School District for $20,400.
According to tax records, the assessed value of property at that time
was $2,500 for the land and $18,000 for the improvements. The District represented to the Schorsches
that it held clear title to the real estate, and signed a warranty deed
transferring the property to them. The
Schorsches enjoyed full use of the real estate for many years, during which
time they paid property taxes and maintenance costs.
In
1993, the Schorsches agreed to sell the property to a third party. However, the purchaser refused to close when
it was discovered that James, Chester and Louise Blader held title to .8 of an
acre of the property.[2] The Blader portion of the land included the
real estate’s only access to State Highway 22.
The Schorsches brought an action against the Bladers for adverse
possession of that .8 of an acre, and against the District for
misrepresentation and breach of warranty.
On motions for summary judgment, the Schorsches lost on the adverse
possession claim and prevailed on the breach of warranty claim. Neither party appeals that decision.
A
trial was held on damages. The
Schorsches argued that § 706.10(5), Stats.,
changed the former common law measure of damages for breach of warranty of
title into contract damages. Therefore,
lost profits and consequential damages were appropriate. The younger Schorsch testified they lost
$13,600 in profits, $1,700 in prejudgment interest and $816 in postjudgment
interest on the lost profits, when an accepted offer to sell for $34,000 fell
through. In addition, he said they
spent various amounts for repairs, insurance, electric bills and taxes from the
date the sale failed. The Schorsches
also claimed $12,243 in attorney fees and litigation expenses, beyond the $20,000
which the District had agreed to pay prior to trial.
After
concluding that damages for lost profits was the correct measure of damages,
the trial court awarded most of what the Schorsches claimed. On appeal, the District challenges the trial
court’s measure of damages, as a matter of law. Alternatively, it requests a new trial on the issue of damages.
DISCUSSION
Standard of Review.
This
case requires us to decide whether § 706.10, Stats., supersedes the common law measure of damages for a
breach of warranty of title. The
determination of the proper measure of damages for a specific claim presents a
question of law which this court reviews independently. Schrubbe v. Peninsula Veterinary
Service, Inc., 204 Wis.2d 37, 41-42, 552 N.W.2d 634, 635 (Ct. App.
1996). We will likewise determine questions
of statutory construction de novo.
State v. Vinje, 201 Wis.2d 98, 98, 548 N.W.2d 118, 120
(Ct. App. 1996).
Damages.
Under
common law, damages for breach of warranty of seisin[3]
are the consideration paid for the land, plus interest thereon from the date of
payment. Conrad v. Trustees of
the Grand Grove of the U.A.O.D., 64 Wis. 258, 263-64, 25 N.W. 24, 27
(1885). When “title fails to only a
part of the land conveyed, the grantee may recover ¼ such a fractional
part of the whole consideration paid as the value at the time of the purchase
of the piece to which the title fails bears to the whole purchase price, and
interest thereon ....” Messer v.
Oestreich, 52 Wis. 684, 696, 10 N.W. 6, 10-11 (1881). The fractional part of the purchase price of
the land to which title failed may be more or less than a similar quantity of
land to which good title was conveyed.
The portion of the purchase price assigned to the land not conveyed will
depend upon its individual characteristics.
See Bartelt v. Braunsdorf, 57 Wis. 1, 3, 14 N.W.
869, 870 (1883). In addition, the
grantee may recover the costs and attorney fees of defending or enforcing the
title, whether successful or not. See
Lakelands, Inc. v. Chippewa & Flambeau Improvement Co., 237
Wis. 326, 342, 295 N.W. 919, 926 (1941).
The
Schorsches maintain that the common law measure of damages for a breach of
warranty of seisin is irrelevant, because it has been superseded by
§ 706.10(5), Stats., which
they assert requires the use of the common law of damages for breach of
contract. No citation is offered for
their assertion, and the District disputes that they are correct.
When
we are asked to apply a statute whose meaning is in dispute, our efforts are
directed at determining legislative intent.
Katie T. v. Justin R., 204 Wis.2d 401, 407, 555 N.W.2d
651, 654 (Ct. App. 1996). In attempting
to determine the intent of the legislature, we begin with the plain meaning of
the language used in the statute. Id. If the language of the statute clearly and
unambiguously sets forth the legislative intent, our inquiry ends, and this
court must apply that language to the facts of the case. However, if the language used in the statute
is capable of more than one meaning, this court will determine legislative
intent from the words of the statute in relation to its context, subject
matter, scope, history, and the object which the legislature intended to
accomplish. Chicago and North
Western Transp. Co. v. Office of Comm'r of Railroads, 204 Wis.2d 1, 7,
553 N.W.2d 845, 848 (Ct. App. 1996).
The
Schorsches rely on the following words from § 706.10(5),[4]
Stats., for their theory of
damages: "A conveyance ... shall
be construed according to its terms, under rules of law for construction of contracts." They argue that because § 706.10(5) requires
deeds to be construed as contracts, the common law of damages for breach of
contract applies, not the common law of damages for breach of warranty of title. Their argument requires us to decide whether
the phrase "construction of contracts" refers to the process of
determining the meaning of words used in the deed or whether that phrase refers
to the types of damages awardable for breach of specific covenants.
The
term, "construction," has a particular meaning when used in legal
parlance. It is synonymous with
"interpretation." Black's Law Dictionary 312 (6th ed.
1991). When one construes a contract,
one determines what the contract means.
See Bank of Barron v. Gieseke, 169 Wis.2d 437, 455,
485 N.W.2d 426, 432 (Ct. App. 1992).
One must do so before it is possible to determine whether a breach has
occurred.
A
deed must also be interpreted to determine its meaning. It may contain several types of promises or
covenants, which are collateral to the conveyance of property. Ollerman v. O'Rourke Co., 94
Wis.2d 7, 30, 288 N.W.2d 95, 102 (1980).
At common law, a deed was construed according to rules of construction
for other written documents. See
Joseph Mann Library Asso. v. City of Two Rivers, 272 Wis. 435,
445-46, 76 N.W.2d 388, 391 (1956) (construing an ambiguous deed according to
the interpretation given to it by the parties); Rioux v. Cormier,
75 Wis. 566, 44 N.W. 654 (1890) (construing the quantity of land conveyed
according to the intention of the parties); Polly v. Gumney, 157
Wis. 362, 147 N.W. 356 (1914) (construing a "deed" to be a mortgage
because the parties did not intend to convey property, but rather to have the
property stand as security for a debt).
If
a warranty deed is given without a stated exception, at common law, the grantor
of a warranty deed, his heirs and personal representatives, covenants with the
grantee, his heirs and assigns, that:
(1) the grantor is lawfully seized of the premises and has the right to
convey the same; (2) the grantee shall have quiet enjoyment of the property;
(3) the property is free from encumbrances; and (4) the grantor will defend the
grantee’s title and right of possession.
Messer, 52 Wis. at 696, 10 N.W. at 10-11. These various warranties are collectively
known as covenants of title. See 20
Am. Jur. 2d Covenants
§ 46 (2d ed. 1995).
Section
706.10(5), Stats., codified
certain common law covenants for the benefit of the grantee, which sometimes
had been excepted from deeds, and established a rebuttable presumption that
they were included, unless the terms of the deed provided to the contrary. It was upon these warranties that the
Schorsches sued.
Section
706.10(5), Stats., did not change
the rules which were used to interpret the meaning of deeds. Stated another way, § 706.10(5) confirms
that the rules of law for construction of contracts are to be used to determine
the substance of the covenants from the grantor to the grantee of a deed. Nothing in the language of the statute
implies any change whatsoever in the measure of damages for a breach of any
covenant. Therefore, we conclude that
the common law measure of damages for breach of warranty of title was not
changed by § 706.10(5).
We
now examine the Schorsches' claim, under the common law of damages for breach
of warranty of title. They were
entitled to recover the portion of the purchase price which they proved to be
attributable to the .8 of an acre of land to which title failed, plus statutory
interest on that amount from the date of purchase. Bartelt, 57 Wis. at 3, 14 N.W. at 870. This recovery includes the intrinsic value
of the .8 of an acre, as well as any extrinsic value the trial court finds it
provided to the parcel on which good title was conveyed, on the date of purchase.
The
Schorsches paid $20,400 for the schoolhouse and 1.8 acres of land. Its then current tax assessment was $20,500,
with $2,500 attributable to the land. There was testimony that the .8 of an
acre, standing alone, was worth $5,000 on the date of trial. However, there was also testimony that the
current market value of the parcel, as a whole, was $36,000 and the .8 of an
acre represented forty-five percent of that amount. There was no direct testimony about what part of the purchase
price the .8 of an acre represented. We remand to the trial court to make that
determination and thereafter to calculate interest on that amount at the
statutory rate from the date of purchase.
The amount so determined, together with the attorney fees and costs
already awarded, are the Schorsches' damages for breach of warranty of title of
the .8 of an acre.
New Trial.
This
court has the authority to order a new trial on damages in the interests of
justice. Section 752.35, Stats.
However, because the District has prevailed on its theory of damages, we
do not address its alternate request for relief.
CONCLUSION
For the reasons set
forth above, we set aside $19,203.50[5]
of the $35,002.67 damage award, and remand for a determination of additional
damages measured by that portion of the $20,400 purchase price, which is
attributable to the .8 of an acre on which title failed, and interest thereon
at the statutory rate, from the date of purchase.
By
the Court.—Judgment affirmed in
part; reversed in part and cause remanded with directions.
[1] This amount may include the extrinsic value, if any, that the .8 of an acre adds to the parcel on which good title was conveyed.
[2] The Bladers’ predecessors in interest had deeded one acre containing the schoolhouse to the District, and later deeded the surrounding land to James, Chester and Louise Blader.
[3] A breach of seisin occurs when the grantor does not lawfully own the property he attempts to convey. See 20 Am. Jur. 2d Covenants § 46 (2d ed. 1995).
[4] Section 706.10(5), Stats., states: "A conveyance by which the grantor contracts to warrant the land or its title shall be construed according to its terms, under rules of law for construction of contracts. A conveyance by which the grantor warrants the land or its title shall be construed, except as the terms of the conveyance may otherwise provide, to include covenants, for the benefit of the grantee, the grantee's heirs, successors and assigns, that the grantor at the time of conveyance is lawfully seized of the land; has good right to convey the same land or its title; that the same land or its title is free from all encumbrance; and that the grantor, the grantor's heirs and personal representatives will forever guarantee and defend the title and quiet possession of the land against all lawful claims whatever originating prior to the conveyance, except as the claims may arise out of open and notorious rights of easement, or out of public building, zoning or use restrictions."